What is SOC 2? Complete Guide to SOC 2 Compliance
Saravanan G
Vice President - Cyber Assurance
January 13, 2026
18 min read
In This Guide
What is SOC 2?
History and Background
Trust Services Criteria
Who Needs SOC 2?
Benefits of SOC 2
Type I vs Type II
What is SOC 2?
SOC 2 (System and Organization Controls 2) is an auditing framework developed by the American Institute of Certified Public Accountants (AICPA). It evaluates how well a service organization protects customer data based on five Trust Services Criteria: Security, Availability, Processing Integrity, Confidentiality, and Privacy.
Unlike ISO 27001, which results in a certificate, SOC 2 produces an independent auditor's report (attestation) issued by a licensed CPA firm. This report provides detailed information about your controls and whether they meet the criteria.
SOC 2 in a Nutshell
What: Auditing framework for service organizations
Who: Any company that stores, processes, or transmits customer data
Output: CPA auditor's report (not a certificate)
History and Background
SOC 2 emerged from the evolution of SAS 70 (Statement on Auditing Standards No. 70), which was replaced by the SOC framework in 2011. The AICPA created three SOC report types:
SOC 1: Internal controls over financial reporting (for service providers affecting client financial statements)
SOC 2: Controls relevant to security, availability, processing integrity, confidentiality, and privacy
SOC 3: Same criteria as SOC 2, but a simplified public report
SOC 2 has become the de facto standard for technology and SaaS companies demonstrating security to US enterprise customers.
The Five Trust Services Criteria
SOC 2 is built around five Trust Services Criteria (TSC). Security is always required; the other four are optional based on your services and customer needs.
1. Security (Required)
Also known as: Common Criteria
Focus: Protection against unauthorized access, use, or modification
Security is the foundation of every SOC 2 report. It covers:
Access controls (logical and physical)
System operations monitoring
Change management
2. Availability (Optional)
Focus: System availability for operation and use as committed
Include this if you make uptime commitments (SLAs). It covers:
Performance monitoring
Disaster recovery
Business continuity
Incident handling for availability
3. Processing Integrity (Optional)
Focus: System processing is complete, valid, accurate, timely, and authorized
Include this if you process transactions or data that must be accurate. It covers:
Input validation
Processing accuracy
Output verification
Error handling
4. Confidentiality (Optional)
Focus: Information designated as confidential is protected as committed
Include this if you handle confidential business information (not personal data—that's Privacy). It covers:
Confidential data identification
Protection measures
Disposal procedures
Disclosure controls
5. Privacy (Optional)
Focus: Personal information is collected, used, retained, disclosed, and disposed of properly
Include this if you collect and process personal data. It covers:
Privacy notice
Consent mechanisms
Data subject rights
Third-party disclosures
Who Needs SOC 2?
SOC 2 is particularly important for service organizations—companies that provide services involving customer data. Common examples:
Industries Commonly Requiring SOC 2
SaaS Companies: Any cloud software provider
Cloud Service Providers: IaaS, PaaS providers
Data Centers: Colocation and managed hosting
Managed Service Providers: IT outsourcing, managed security
Payment Processors: Financial transaction handling
Healthcare Technology: EHR systems, health tech
Signs You Need SOC 2
Enterprise customers ask for it in security questionnaires
You've lost deals because you don't have it
Your sales cycle is extended by security reviews
Competitors have SOC 2 and you don't
You're expanding into the US enterprise market