SOC 2 vs. ISO 27001

Updated: Sep-20

The two leading InfoSec assurance standards are SOC 2 & ISO 27001. What's the difference?


Before going into the what’s different, it’s important to note that they are very similar standards. A mapping of their criteria, is available on the AICPA Website showing ~80% overlap. Both standards are used to demonstrate to your customers that you’re appropriately managing your information security.


What’s the difference?


Based on the similarities, you would expect end users would accept either interchangeably. Unfortunately, that’s not always the case. There are technical differences beyond the criteria. Perhaps more importantly, there’s varying perceptions and preferences that play a role.


SOC 2 vs. ISO 27001

The key differences are:


1. Flexible vs. Prescribed Requirements


SOC 2 has a set of criteria that are flexible to adapt to the nature of the company, systems and services. That makes it a common choice for SaaS providers with outsourced cloud-infrastructure. ISO 27001 has 114 standard, prescribed control practices, that are considered for all organisations.


2. Design + Operation of Controls


ISO 27001 is a standard for design and implementation of an information security management system (ISMS). SOC 2 places focus on the "operating effectiveness" of security and internal control practices. This means assessing whether the controls are operationalised and followed in practice - generally providing a higher level of assurance for customers. Operating effectiveness is becoming a key consideration with new standards like CPS 234 mandating it for financial services third-party risk management. Read more about this difference in our post ISO 27001 stamped inadequate for Open Banking.


3. Security + Additional Criteria


ISO 27001 is purely an information security focus, with separate ISO standards that cover privacy, business continuity and other areas. SOC 2 has optional additional criteria for Availability, Confidentiality, Privacy and Processing Integrity, that can be optionally included in the SOC 2 report to meet broader end-user requirements.


4. Attestation vs. Certification


SOC 2 is an attestation report, which provides a "System Description" of the business processes and control practices. ISO 27001 is a certificate confirming compliance. The System Description provides additional transparency and verified information to end users. That may enable reduced security due diligence questions accordingly.



Those high-level differences are the main things you should consider when determining which standard is right for you, although many organisations initially or eventually meet both standards. The more technical/detailed view comparing the two standards is as follows.


high level differences


Which is More Suitable to You?


Both standards are intended to provide assurance to your customers. There’s three main considerations for what will best satisfy your customers:

  1. Have your customer(s) specifically requested or mandated one of the two standards?

  2. What locations are your customers based?

  3. What industries do your customers operate in?

Customers prefer the standard they are more familiar with. European customers tend to prefer ISO 27001, whereas SOC 2 is preferred in the US. The Financial Services industry prefers SOC 2 that aligns to their focus on operating effectiveness and coming from the accountancy practice that applies to their business and regulatory requirements more broadly.


In Australia, SOC 2 has become the primary focus of enterprise businesses for their third-party risk management. The ACCC and OAIC issued Consumer Data Right Regulation explicitly labels ISO 27001 inadequate for the accreditation process. CPS 234 is widely regarded as requiring additional operating effectiveness assurance on top of what ISO 27001 covers. The combination of these developments and other perceptions has increased the drive towards SOC 2 in recent years.


It's best to discuss the approach with existing customers and/or any prospective customers. That way, there's no surprises and you can make an informed choice.

SOC Reporting ISO 27001

SOC 2 & ISO 27001 are the leading standards to provide assurance to customers. They have a very similar focus, but differ in practice...