SOC 2 (Type 1 vs Type 2)
SOC 2 — System and Organization Controls 2 — is a reporting framework developed by the American Institute of Certified Public Accountants (AICPA) that evaluates how well a service organization protects customer data. A SOC 2 report is produced by an independent CPA firm and is widely used to give clients and partners assurance about a provider’s controls.
The Trust Services Criteria
SOC 2 evaluates controls against the Trust Services Criteria: security (always included), and, as relevant, availability, processing integrity, confidentiality, and privacy. The report describes the organization’s controls and the auditor’s findings on whether those controls are suitably designed and operating.
Type 1 Versus Type 2
A SOC 2 Type 1 report assesses whether controls are suitably designed at a single point in time — a snapshot. A SOC 2 Type 2 report assesses whether those controls operated effectively over a period of time, typically several months to a year. Type 2 is more rigorous and more valued, because it demonstrates that the controls actually work in practice, not just that they exist on paper.
Why SOC 2 Matters for Investment & Professional Firms
For DFW professional firms — particularly those that deliver technology or assurance services to clients — a SOC 2 report is increasingly requested in client due diligence. DKBinnovative helps firms in Plano, Frisco, Irving, and Las Colinas prepare for SOC 2 by implementing and documenting the controls an auditor will test.