Quick answer
SOC 2 (System and Organization Controls 2) is an audit report, created by the AICPA, that shows how a service company protects customer data. An independent CPA examines your controls against five Trust Services Criteria, Security, Availability, Processing Integrity, Confidentiality, and Privacy, and issues a report your customers can trust. It is the de facto security standard for B2B SaaS.
What does SOC 2 actually mean?
SOC 2 stands for System and Organization Controls 2. It is a framework and reporting standard maintained by the American Institute of Certified Public Accountants (AICPA) that measures how well a company safeguards the data it handles on behalf of its customers. The examination is performed under the SSAE 18 attestation standard by a licensed CPA firm, which issues a formal report describing your controls and whether they are designed, and operating, as intended.
Unlike a checklist you grade yourself against, SOC 2 is opinion-based: an independent auditor puts their professional reputation behind a statement about your security program. That independence is exactly why enterprise buyers ask for it.
'Certified' is a misnomer
There is no SOC 2 certificate and no governing body that certifies you. You receive an auditor's report with an opinion. "SOC 2 certified" is just common shorthand for "has passed a SOC 2 audit with a clean report."
What are the five Trust Services Criteria?
A SOC 2 audit is scoped around the Trust Services Criteria (TSC). Only Security is mandatory, it is the "Common Criteria" every SOC 2 report must cover. You add the other four only if they are relevant to the service you sell.
| Criterion | What it covers | Required? |
|---|---|---|
| Security | Protection against unauthorized access, breaches, and misuse (firewalls, MFA, access control). | Yes, always |
| Availability | The system is up and reachable per your SLAs (monitoring, failover, disaster recovery). | Optional |
| Processing Integrity | Data is processed completely, accurately, and on time. | Optional |
| Confidentiality | Confidential data (e.g. business secrets) is restricted and protected. | Optional |
| Privacy | Personal information is collected, used, and disposed of per your privacy notice. | Optional |
Who needs a SOC 2 report?
If your company stores or processes another company's data, you are likely to be asked for SOC 2. It is most common among:
- B2B SaaS and cloud software companies selling to mid-market and enterprise buyers
- Data centers, hosting, and infrastructure providers
- Managed service providers and IT outsourcers
- Analytics, AI, and data-processing vendors that touch customer datasets
The trigger is almost always a sales deal: a prospect's security or procurement team requires a current SOC 2 report before they will sign. In practice, SOC 2 has become a price of entry for selling to the enterprise.
What is the difference between SOC 2 Type I and Type II?
SOC 2 comes in two report types. Type I is a snapshot; Type II proves your controls held up over time, and it is the one most enterprise buyers expect.
| Type I | Type II | |
|---|---|---|
| Question it answers | Are the controls designed correctly today? | Did the controls operate effectively over time? |
| Point in time vs period | A single date | A window of 3–12 months |
| Effort & cost | Lower | Higher |
| Buyer preference | Accepted as a first step | Usually the real requirement |
We break this down fully in SOC 2 Type I vs Type II.
How long does SOC 2 take, and what does it cost?
Timeline and cost depend on your scope and how mature your controls already are. Typical ranges for a first-time audit:
| Factor | Type I | Type II |
|---|---|---|
| Readiness work | ~6–8 weeks | ~6–8 weeks + observation window |
| Observation window | None (point in time) | 3–12 months (commonly 3–6) |
| Auditor fee (typical) | $5,000–$25,000 | $12,000–$60,000 |
| Total program cost | ~$10,000–$40,000 | ~$20,000–$100,000 |
Total cost also includes compliance automation software, internal staff time, and any remediation such as a penetration test. Automating evidence collection is where most teams save the most time and money.
How do you get SOC 2 compliant?
The path from zero to a signed report follows six broad steps:
- 1Define your scope, pick the Trust Services Criteria and systems the audit will cover.
- 2Run a gap assessment against the criteria to find missing controls.
- 3Implement controls: access management, encryption, logging, vendor reviews, incident response, and security training.
- 4Choose Type I or Type II and, for Type II, set your observation window.
- 5Collect evidence continuously and engage an independent, licensed CPA firm.
- 6Complete the audit, remediate any findings, and receive your report.
For the full working list, see the SOC 2 compliance checklist.
