SOC 1 vs. SOC 2 vs. SOC 3: Why your company needs compliance to grow

Compliance is crucial for businesses to grow and secure enterprise deals. Service Organization Control (SOC) reports are issued by Certified Public Accountants (CPAs) to assess the internal control processes of a company. There are three primary types of SOC reports: SOC 1, SOC 2, and SOC 3. - SOC 1 focuses on financial reporting and is essential for companies that handle their customers' financial information. It comes in two types: Type 1 and Type 2, with the latter testing the effectiveness of controls over a set period. - SOC 2 is centered around operations and compliance, particularly in cloud computing and data security. It also has two types of reports and aligns with AICPA's five Trust Services Criteria: Security, Confidentiality, Processing Integrity, Privacy, and Availability. - SOC 3 contains the same information as SOC 2 but is intended for a general audience. Companies often use it to display compliance on their websites or in marketing materials. To become compliant, companies must work with an independent CPA who will audit their internal control processes. The AICPA has final say on compliance, and obtaining a SOC report can help businesses avoid individual audits from customers.