29% of businesses have lost new deals because they were missing a compliance certification.
Trust fuels business in our digital age.
For newcomers, standing out means more than offering a great product — it means proving your security.
A SOC 2 Type 1 report could be your ticket to closing those deals.
It's budget-friendly, speeds up sales, and kick-starts your compliance journey.
But why not SOC 2 Type 2? What's the real difference between Type 1 and Type 2? Let's untangle the confusion and understand which one to pick.
SOC 2 Type 1 vs. Type 2: The Key Differences
SOC 2 Type 1 offers a snapshot of your security controls at a specific moment, assessing their design and implementation right now.
SOC 2 Type 2 evaluates those controls over at least six months, verifying they're effective over time.
Key Differences
- Assessment Period:some text
- SOC 2 Type 1: Single point in time.
- SOC 2 Type 2: Minimum of six months.
- Focus:some text
- SOC 2 Type 1: Design and implementation of controls.
- SOC 2 Type 2: Design and operational effectiveness.
- Audit Process:some text
- SOC 2 Type 1: One-time evaluation.
- SOC 2 Type 2: Continuous testing over time.
- Client Assurance:some text
- SOC 2 Type 1: Basic assurance.
- SOC 2 Type 2: Higher confidence due to extended assessment.
Main Factors to Consider
- Time and Resources: Type 1 is quicker; Type 2 requires more commitment.
- Client Requirements: Large enterprises often demand Type 2.
- Budget: Type 2 is more costly due to its scope.
Why Should You Get a SOC 2 Type 1 Report?
Obtaining a SOC 2 Type 1 report is a smart move for businesses aiming to secure high-value contracts, speed up sales cycles, and outshine competitors — all without hefty costs or long waits.
It's the fastest, most cost-effective way to prove your commitment to data security and set the stage for future compliance milestones.
Gain a Competitive Edge in the Market
In industries like SaaS, blockchain, finance, and healthcare — where data security is mandatory — a SOC 2 Type I report elevates you above competitors who lack formal compliance.
With this report you can:
- Prove Your Commitment to Security: Show clients that protecting their data is ingrained in your operations, not just a talking point.
- Win High-Value Clients: Secure contracts with enterprises that demand stringent security standards, positioning your business as the obvious choice.
- Enhance Your Reputation: Build trust with clients and stakeholders by demonstrating you meet rigorous compliance standards.
Accelerate Your Sales Cycle
Working with large enterprises means meeting strict security requirements — quickly. Every delay can cost you a significant deal.
So, how does the Type I report accelerate it?
- Rapid Audit Completion: Finish the SOC 2 Type I audit in as little as four to eight weeks, far faster than the six months a Type II audit might take.
- Immediate Compliance Proof: Provide necessary documentation promptly to satisfy client due diligence.
- Eliminate Sales Obstacles: Address security concerns upfront, smoothing the path to finalized contracts.
Cost-Effective Compliance Solution
For startups and smaller companies, every dollar counts. You need compliance without draining your resources.
SOC 2 Type I reports typically cost between $8,000 and $30,000, a fraction of what a Type II report might require.
Lower compliance costs free up funds for product development, marketing, or hiring key talent.
Quick Proof of Compliance
Achieving compliance fast can avoid missing out on lucrative contracts due to delays.
When a potential client asks, "Are you compliant?", you want to answer "Yes" immediately.
With a Type II report you can satisfy urgent compliance needs without the lengthy wait for a Type II report.
Lay the Foundation for Future Compliance
Your SOC 2 Type I report is the first building block in your compliance journey:
- Step Toward SOC 2 Type II: Use insights gained to prepare for the more rigorous Type II audit.
- Identify Improvement Areas: Spot gaps and strengthen security measures before they become issues.
- Align with Other Frameworks: Position yourself to meet additional standards like ISO 27001 or NIST, opening doors to new markets.
Respond Quickly to Market Demands
In fast-paced industries, you need to be agile. With the SOC 2 Type I you can meet compliance requirements promptly and enter new markets faster.
Additionally, provide compliance documentation swiftly during vendor evaluations, speeding up partnership opportunities.
To sum up, pick the Type I report if:
- You're a startup
- Need compliance fast
- Don't have the time and resources for a Type II report.
Now, if you're going for saving time and money, you might as well do it well.
With EasyAudit, you can fast-track your SOC 2 Type I report, allowing you to focus on closing deals and expanding your business.
Our AI-driven platform streamlines the entire process: it asks you questions, learns and generates custom security controls for your business in no time.
Don't overcomplicate SOC 2. Get started with EasyAudit today.
How to Achieve SOC 2 Type 1 Certification Efficiently
Securing deals with large enterprises often hinges on one crucial factor: SOC 2 Type 1 certification. But the path to certification doesn't have to be a drain on your resources.
Let's break it down into four strategic steps:
Step 1: Define Your Audit Scope Precisely
Start by setting clear boundaries. Focusing your audit scope reduces complexity and conserves resources.
- Identify Critical Services and Data: Pinpoint which services handle sensitive information.
If you're a SaaS company, this could be your customer data platform or authentication systems. - Assess Your Risk Appetite: Determine how much risk you're willing to accept. This guides your control choices and keeps the process manageable.
- Use the Trust Services Criteria: Rely on the AICPA's framework covering security, availability, processing integrity, confidentiality, and privacy.
- Focus on Essentials: Don't try to cover everything at once. Target specific services or data types to make compliance more efficient.
- Build a Cross-Functional Team: Include leaders from HR, Technology, Sales, and other departments. Their collaboration ensures all angles are covered.
- Implement Necessary Controls: Address gaps within your scope by establishing appropriate controls. This strengthens your compliance stance.
- Document Everything: Keep detailed records of your scope definitions and controls. This documentation is invaluable during the audit.
Step 2: Align Controls with Trust Services Criteria
With your scope set, fortify your systems according to the Trust Services Criteria to meet SOC 2's requirements.
Security
Protect against unauthorized access.
- Enable Multi-Factor Authentication (MFA): Require a code from a mobile device when accessing critical systems.
- Deploy Web Application Firewalls (WAF): Guard against threats like SQL injection and cross-site scripting attacks.
Availability
Ensure your systems are reliable.
- Schedule Regular Backups: Automate backups of essential data to prevent loss.
- Develop a Disaster Recovery Plan: Outline steps to restore operations swiftly after unexpected events.
Confidentiality
Keep sensitive information secure.
- Encrypt Data: Protect data at rest and in transit, especially client and financial information.
- Set Access Controls: Limit data access to only those who need it.
Processing Integrity
Ensure accurate and reliable data processing.
- Validate Inputs: Prevent incorrect or malicious data from entering your systems.
- Monitor for Errors: Detect anomalies that could indicate processing issues.
- Manage Access Carefully: Control user credentials and restrict physical access to critical systems.
- Conduct Regular Assessments: Continuously evaluate risks and monitor controls to maintain compliance.
Privacy
Handle personal information responsibly.
- Obtain Clear Consent: Ensure you have permission to collect and use personal data.
- Limit Data Collection: Only gather what's necessary. Don't ask for social security numbers if you don't need them.
- Dispose of Data Properly: Securely erase information that's no longer required.
Step 3: Perform a Readiness Assessment
Before the formal audit, evaluate your preparedness to uncover and address gaps proactively:
- Understand the SOC 2 Type 1 Scope: Focus on the design effectiveness of controls related to the Trust Services Criteria.
- Review Current Controls: Compare your policies against SOC 2 requirements to identify strengths and weaknesses.
- Identify Gaps: Find where controls fall short — maybe your incident response plan needs more detail.
- Enhance Controls: Develop or refine controls to meet standards, tailoring them to your operations.
- Stay Updated with Guidelines: Ensure you're following the latest AICPA guidelines.
- Consider Expert Input: Engaging experienced SOC 2 auditors now can help avoid pitfalls later.
- Organize Documentation: Keep comprehensive records to facilitate a smoother audit.
Step 4: Choose the Right Auditor
Selecting an experienced, independent auditor adds credibility to your certification.
- Hire a Certified Public Accountant (CPA): Only CPAs can perform SOC 2 audits as per AICPA rules.
- Check Auditor Experience: Look for auditors with a strong SOC 2 track record, especially in your industry.
- Ensure Independence: The auditor must be impartial for the certification to hold weight, meaning they can't be apart of the management or leadership of the company they are auditing.
- Know What's in the Audit Report:some text
- Management’s Assertion: Your declaration of the controls in place.
- System Description: Details about your systems and processes.
- Auditor’s Opinion: Assessment of your controls' design effectiveness.
- Test Results: Findings that highlight areas of concern or excellence.
p.s. If you want to learn the exact step-by-step process of choosing the right auditor for your business, check out this guide.
Automate to Simplify Compliance
Balancing SOC 2 compliance with business growth is a challenge. Automation can transform this process.
Imagine reducing your compliance preparation from months to weeks without cutting corners.
While others are bogged down in paperwork, you're closing deals.
How?
EasyAudit's AI-driven platform automates over 100 hours of manual work, providing custom security controls tailored to your operations.\
(Not generic templates that leave gaps)
Let AI handle the heavy lifting, cut costs in half, and get your SOC 2 Type I report ready in half the time.
Book a demo with EasyAudit today.
How Much Does a SOC 2 Type 1 Audit Cost?
For most mid-market companies, auditor fees alone range from $10,000 to $17,000. But that's just the beginning.
When you add up all the associated expenses, the total investment can climb up to $147,000.
Breaking Down the Costs
- Auditor Fees: The primary expense. Expect to pay between $10,000 and $17,000 for a qualified auditor to assess your controls and issue the official report.
- Readiness Assessments: Identifying control gaps before the audit can start around $10,000 but saves costly surprises later on.
- Security Tools: Upgrading or implementing security measures can add $5,000 to $50,000, depending on your needs.
- Legal Review: Expert insights to ensure all documentation meets regulatory standards might cost about $10,000.
- Security Training: Educating your team typically runs around $5,000.
- Opportunity Costs: Every hour your team spends on compliance is an hour not spent on product development or closing deals.
- Technology Investments: New solutions for asset management or compliance tracking ensure sustained compliance but add to upfront costs.
Is It Worth the Investment?
Absolutely. Here's why:
- Unlock High-Value Contracts: Without SOC 2 compliance, you might miss out on deals worth hundreds of thousands — or even millions.
- Stand Out in the Market: In competitive fields like SaaS and FinTech, compliance isn't just a box to check — it's a differentiator. It shows clients you're serious about security.
- Avoid Costly Breaches: The average cost of a data breach in 2023 was $4.35 million. Investing in compliance is a fraction of that potential loss.
But what if you could achieve SOC 2 compliance without the hefty price tag and extended timelines?
That's where EasyAudit comes in.
Cut your compliance costs from up to $147,000 to under $30,000. Our AI-driven platform, saves your team over 100 hours of manual work, making sure you can work on product development and sales instead.
No need for expensive consultants.
No hidden fees attached.
Schedule a demo with EasyAudit and start closing high-value contracts without breaking the bank.
How Long Does the Audit Take?
Time is money, especially when enterprise contracts are at stake. A SOC 2 Type 1 audit typically takes 3 to 6 months. But the clock starts ticking long before the auditor arrives.
The Audit Timeline
- Preparation Phase (1 to 3 Months) Implementing the required controls and policies is a heavy lift. The sheer volume of work can be overwhelming and time consuming.
- Audit Fieldwork (2 to 5 Weeks) The auditor examines your controls, gathers evidence, and tests effectiveness. This phase demands close collaboration and quick responses.
- Report Generation (2 to 6 Weeks) Findings are compiled into a formal report.
What Affects the Timeline?
- Readiness Levels: Addressing issues upfront can speed up the audit.
- Complexity of Systems: More intricate systems and larger teams mean more ground to cover.
- Existing Security Practices: Robust security measures can make the audit move faster.
The Cost of Delay
Every month you're not compliant is a month potential revenue slips away. You might miss out on critical market opportunities or have to postpone product launches. For fast-growing companies, these delays can cost more than the audit itself.
But it doesn't have to take that long.
With EasyAudit, you can cut your compliance significantly
Our AI-driven platform streamlines the entire process, getting you audit-ready in a matter of weeks, not months.
Don't let time hold you back. Book a demo with EasyAudit today.
How to Transition from a SOC 2 Type 1 to a Type 2 Report
Moving from a SOC 2 Type 1 report to a Type 2 is a strategic move that can unlock significant business opportunities.
A Type II report assesses their effectiveness over an extended period, typically 3 to 12 months.
Shifting to it provides higher assurance to your clients, especially large enterprises that demand stringent security measures.
Assemble Your A-Team
Begin by bringing together a cross-functional team that includes leaders from IT, HR, Operations, and Legal. Ensure every aspect of your control environment is covered.
Consider engaging a compliance consultant to guide you through the nuances and keep you on track.
Define Your Audit Scope
Focus on the five Trust Services Criteria:
- Security
- Availability
- Processing Integrity
- Confidentiality
- Privacy
Align your controls with these criteria to lay a solid foundation for the audit. For instance, if you're in the healthcare sector, ensuring that patient data encryption meets confidentiality standards is non-negotiable.
Spot and Fix Control Gaps
Perform a thorough assessment to identify any gaps in your existing controls. Implement the necessary tools and procedures to address these gaps promptly.
Aim to complete this remediation within two months to keep your momentum.
Take, for example, multi-factor authentication (MFA). If MFA isn't implemented for critical systems, you're leaving a door open for potential breaches.
Partner with the Right Audit Firm
Choosing an experienced audit firm can make or break your transition. Opt for an independent, accredited CPA firm with a strong track record in SOC audits.
Plan for Ongoing Compliance and Improvement
A Type II audit isn't a one-and-done deal — it requires evidence of control effectiveness over time.
Establish processes for continuous monitoring and document control activities throughout the audit period. This could involve:
- Automated logging of security events
- Regular access and permission reviews
- Scheduled vulnerability assessments
Consider setting quarterly reviews to assess your controls and make necessary adjustments.
This not only keeps you compliant but also builds customer confidence, showing that you're committed to maintaining high security standards.
Achieve SOC 2 Type 1 Compliance Faster with EasyAudit
EasyAudit slashes your SOC 2 Type 1 certification time from months to weeks, cutting costs from up to $147,000 to under $30,000.
Automates over 100 hours of manual work by getting custom security controls tailored to your operations.
While your competitors wrestle with compliance complexities, you're closing deals and growing your market share.
Why let lengthy, expensive compliance processes hold your business back?
Try EasyAudit today and turn compliance into your competitive advantage.
Frequently Asked Questions
Is SOC 2 Type 1 a Requirement?
Legally, SOC 2 Type 1 compliance isn't enforced. But if you're aiming for contracts with Fortune 500 companies or leading enterprises in SaaS, Blockchain, Finance, or Healthcare, it's essentially mandatory.
Look at it from this angle: Your SaaS startup misses out on a $500,000 deal, forcing you to settle for just $147,000 because your startup lacks SOC 2 compliance. That's $353,000 lost — not due to product shortcomings, but simply because your startup couldn't provide a compliance report.
In today's market, clients demand reassurance that their data is protected. A SOC 2 Type I report tells clients you take their data seriously.
Who Performs SOC 2 Type 1 Audits?
Only Certified Public Accountants (CPAs) accredited by the AICPA are authorized to conduct SOC 2 Type 1 audits. These professionals rigorously assess your systems and controls against established standards.
The auditor you choose can significantly impact your compliance journey. Opt for the wrong one, and you might face 10 months of prolonged audits and invoices exceeding $100,000 — all without guaranteeing client satisfaction.
On the flip side, partnering with an auditor who leverages modern compliance automation can reduce costs and timelines by up to 80%.
What Types of Controls Are Evaluated in a SOC 2 Type 1 Audit?
A SOC 2 Type 1 audit examines your organization's controls at a specific point in time, focusing on the five Trust Services Criteria:
- Security: Are you safeguarding against unauthorized access and cyber threats?
- Availability: Can clients rely on your systems being operational when needed?
- Processing Integrity: Is your data processing timely and accurate?
- Confidentiality: Are you protecting sensitive information from unauthorized disclosure?
- Privacy: Do you handle personal information responsibly throughout its lifecycle?
Auditors also delve into:
- Control Environment: Does your company culture promote integrity and ethical values?
- Information and Communication: How effectively does crucial information flow within your organization regarding controls?
- Risk Assessment: Do you proactively identify and address potential risks?
- Control Activities: What specific measures ensure you meet your objectives?
- Monitoring of Controls: How do you verify that your controls remain effective over time?
How Often Do I Need to Undergo SOC 2 Type 1 Audits?
SOC 2 compliance isn't a one-time event. To keep your certification current and meet client expectations, annual SOC 2 Type 1 audits are recommended.
As your organization scales, consider transitioning to a SOC 2 Type 2 audit. Unlike Type 2, which provides a snapshot, Type II evaluates your controls over six months to a year. It shows clients not just that you have controls, but that they're effective over time.
This shift involves more commitment, but it offers greater assurance to your clients and strengthens your position when negotiating high-value contracts.
In fast-paced industries or heavily regulated sectors, more frequent audits might be necessary. Reports older than a year can raise concerns, potentially jeopardizing deals.