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SOC 2 Compliance: The Complete Guide [2026]
SOC2Auditors Research Team
Compliance & Security Experts
Expert-Reviewed Content
This guide is based on analysis of 500+ SOC 2 audits, interviews with certified CPA auditors, and current AICPA Trust Services Criteria (2017, updated 2022).
Everything you need to know about SOC 2 compliance: what it is, who needs it, how much it costs, and how to get certified without losing your mind.
In This Guide
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What is SOC 2?
SOC 2 (System and Organization Controls 2) is an auditing framework developed by the American Institute of CPAs (AICPA) that evaluates how service organizations manage and protect customer data. It's the gold standard security certification for SaaS, cloud, and technology companies.
Unlike compliance frameworks that prescribe specific controls (like ISO 27001 or PCI DSS), SOC 2 is principles-based. You design your own security controls based on the Trust Service Criteria, and an independent auditor verifies they're working effectively.
Think of SOC 2 as proof that your security practices aren't just marketing BS. It's third-party validation that you actually do what you say you do when it comes to protecting customer data.
Who Needs SOC 2 Compliance?
SOC 2 is required for any service organization that stores, processes, or transmits customer data. Here's the reality:
- ✓ SaaS Companies: If you're selling to enterprise customers (especially Fortune 500), SOC 2 Type 2 is non-negotiable. You'll lose deals without it.
- ✓ Cloud Infrastructure Providers: AWS, Google Cloud, and Azure competitors need SOC 2 to be taken seriously.
- ✓ Data Centers & Hosting: Physical and virtual hosting providers must demonstrate infrastructure security.
- ✓ Managed Service Providers: MSPs handling customer systems and data need SOC 2 certification.
- ✓ FinTech & Healthcare: Highly regulated industries demand SOC 2 plus industry-specific certifications.
- ✓ API & Integration Platforms: If customer data flows through your systems, you need SOC 2.
When do you need it? Most companies pursue SOC 2 when:
- Enterprise prospects include it in security questionnaires
- You're losing deals due to lack of certification
- A specific customer makes it a contract requirement
- You're raising a Series A/B and investors want assurance
- You're preparing for an exit or IPO
The 5 Trust Service Criteria
SOC 2 evaluates your controls based on five Trust Service Criteria (TSC). Security is mandatory; the others are optional based on your business model.
1 Security (Mandatory)
Required for all SOC 2 audits. Covers how you protect systems and data from unauthorized access, both physical and logical.
Key controls include:
2 Availability (Optional)
Evaluates system uptime and accessibility. Choose this if your customers depend on your service being available 24/7.
Key controls: Redundancy, failover, DR planning, monitoring.
3 Processing Integrity (Optional)
Ensures your system processes data completely, accurately, and in a timely manner. Important for financial systems, payment processors, and data analytics.
Key controls: Data validation, error checking, QA testing.
4 Confidentiality (Optional)
Protects information designated as confidential. Covers data specifically marked as confidential by customers (NDAs, IP, etc.).
Key controls: Data classification, secure destruction, training.
5 Privacy (Optional)
Addresses personal information (PII) collection, use, retention, disclosure, and disposal. Critical for GDPR/CCPA alignment.
Key controls: Privacy notices, consent, data subject rights, retention policies.
Recommendation: Most companies start with Security only for their first SOC 2. Add other criteria in subsequent audits based on customer requirements.
SOC 2 Type 1 vs Type 2: What's the Difference?
This is where most people get confused. Here's the simple version:
SOC 2 Type 1
- Evaluates: Design of controls
- Timeframe: Point-in-time
- Duration: 3-6 months
- Cost: $12K-$160K
- Best For: Early stage, fast audit
SOC 2 Type 2
- Evaluates: Design + Effectiveness
- Timeframe: 3-12 months observation
- Duration: 6-18 months
- Cost: $15K-$450K
- Best For: Enterprise sales
Reality check: Most enterprise customers prefer or require Type 2. Type 1 might help you get in the door, but you'll need Type 2 to close larger deals. Many companies do Type 1 first, then Type 2 6-12 months later.
→ Read our complete Type 1 vs Type 2 comparison
How Much Does SOC 2 Cost?
Let's talk real numbers. SOC 2 costs vary wildly based on auditor choice, company size, system complexity, and scope.
| Firm Type | Type 1 Cost | Type 2 Cost | Timeline |
|---|---|---|---|
| Specialist (Prescient, A-LIGN) | $12K-$40K | $15K-$75K | 3-8 months |
| Regional (Moss Adams, etc.) | $15K-$50K | $20K-$95K | 4-10 months |
| Mid-Tier (RSM, BDO) | $20K-$65K | $30K-$120K | 5-14 months |
| Big Four (Deloitte, PwC) | $40K-$160K | $60K-$450K | 6-20 months |
Total first-year cost: $30K-$500K+ generally, when factoring internal labor, tools (Vanta/Drata: $5K-$50K), and remediation.
→ Read our complete SOC 2 pricing guide
How Long Does SOC 2 Take?
Here's the realistic timeline from "we need SOC 2" to "we have our report":
Type 1 Timeline: 3-8 Months
- Readiness Assessment: 2-4 weeks
- Control Implementation: 1-3 months
- Auditor Selection: 2-4 weeks
- Audit Kickoff: 1 week
- Evidence Collection: 2-4 weeks
- Testing & Fieldwork: 2-4 weeks
- Remediation: 1-4 weeks
- Report Issuance: 2-3 weeks
Type 2 Timeline: 6-18 Months
- All Type 1 Prep Steps: 2-4 months
- Observation Period: 3-12 months
- Interim Testing: 2-4 weeks
- Final Fieldwork: 3-6 weeks
- Report Issuance: 3-5 weeks
→ Read our detailed SOC 2 timeline guide
SOC 2 Audit Process: Step-by-Step
Readiness Assessment (2-4 weeks)
Identify control deficiencies. Map controls to Trust Service Criteria. Create remediation plan.
Control Implementation (1-4 months)
Fix gaps. Document policies. Implement technical controls (MFA, encryption, etc.). Set up GRC tool.
Auditor Selection (2-4 weeks)
Get 3-5 quotes. Compare pricing, timeline, and fit. Sign engagement letter.
Evidence Collection & Fieldwork
Provide evidence. Auditor tests controls. Fix any findings (remediation). Initial report drafted.
Report Issuance
Final report delivered with auditor's opinion. You are now SOC 2 compliant!
→ Read our auditor selection guide
Common SOC 2 Mistakes to Avoid
Starting Too Late
Don't wait until you've lost a deal. Begin 6-9 months before you expect enterprise requests.
Wrong Auditor Choice
Big 4 isn't always best. Specialist firms can be faster and cheaper.
Skipping Readiness
Starting an audit with gaps is a waste of money. Assess first, then audit.
Treating as "One-and-Done"
SOC 2 is continuous. Annual renewal is required to stay compliant.
SOC 2 vs Other Frameworks
SOC 2 vs ISO 27001
Use Case: SOC 2 for US market, ISO for EU/Global.
SOC 2 vs HIPAA
Use Case: Healthcare needs HIPAA mandated; SOC 2 adds market trust.
FAQ: SOC 2 Compliance
Can I fail a SOC 2 audit?
Not exactly. Reports are "unqualified" (clean) or "qualified" (with exceptions). A qualified report is effectively a fail for sales purposes.
How often do I need to renew SOC 2?
Annually. Type 2 reports cover a period, usually 12 months, and need to be renewed to avoid gaps in coverage.
Can I share my SOC 2 report publicly?
No. SOC 2 reports are confidential and should only be shared under NDA. You can share a "SOC 3" report publicly if you pay for one.
What if I use AWS/GCP?
You inherit physical infrastructure controls from them, but you are still responsible for your application, data, and access controls (Shared Responsibility Model).
Related guides: SOC 2 Audit Cost • How to Choose an Auditor • Type 1 vs Type 2
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