What is the difference between SOC 2 and ISAE 3402?: Which is right for your organization?

Organizations that work with sensitive customer data or financial processes must be able to demonstrate that their internal controls are in good order. Two widely used international standards for this purpose are SOC 2 en ISAE 3402. Although both certifications pertain to internal controls, they differ in key aspects. But what exactly do they mean? And which one is the best fit for your organization?

In this article, we dive deep into the differences between SOC 2 and ISAE 3402, The audit processes and which certification you should choose.

What is SOC 2?

SOC 2 (System and Organization Controls 2) is an audit framework that focuses on the security, availability, and confidentiality of customer data. This is assessed based on the Trust Services Criteria, which consist of:

• Security
• Availability
• Processing Integrity
• Confidentiality
• Privacy

SOC 2 is often used by technology companies, SaaS providers, and cloud providers to prove to customers that their data is well-protected.

There are two types of SOC 2 reports:

1. SOC 2 Type I A snapshot of internal controls on a specific date.
2. SOC 2 Type II: An evaluation of the effectiveness of controls over a specific period (usually 6 to 12 months).

What is ISAE 3402?

ISAE 3402 (International Standard on Assurance Engagements 3402) is an auditing standard that focuses on the internal controls of financial processes in outsourced operations. It is primarily intended for companies that provide services to other companies, such as payroll companies and IT service providers.

Just like SOC 2, ISAE 3402 has two report types:

• ISAE 3402 Type I: Reviews the design of controls at a specific time.
• ISAE 3402 Type II: Investigates whether the controls have been effective over a given period.

This certification is often required by financial institutions, auditors and companies responsible for sensitive financial processes. This certification is often required by financial institutions, auditors and companies responsible for sensitive financial processes.

Key Differences Between SOC 2 and ISAE 3402

Feature	SOC 2	ISAE 3402
Goal	Customer Data Protection	Financial risk management in outsourcing
Area of focus	Security, availability, and privacy	Internal controls for financial processes
Branch	IT, SaaS, Cloud Companies	Financial service providers, accountants
Report types	Type I and Type II	Type I and Type II
Auditing Standard	AICPA (American)	IFAC (International)
Customer focus	Focused on customers and partners	Targeted at supervisors and auditors

Which certification is right for your organization?

• Choose SOC 2 If you are a technology company, SaaS provider, or cloud provider and want to demonstrate that you are protecting customer data well.
• Choose ISAE 3402 when you perform financial processes for clients and need to prove that your internal control meets the requirements of accountants and regulators.

Costs and duration of certification

The costs and duration of SOC 2 and ISAE 3402 vary depending on your organization's complexity. Generally speaking:

• SOC 2 Type I€20,000 – €50,000, lasts 3–6 months
• SOC 2 Type II€50,000 – €100,000, lasts 6-12 months
• ISAE 3402 Type I€25,000 – €60,000, lasts 3-6 months
• ISAE 3402 Type II€60,000 - €150,000; lasts 6-12 months

Frequently Asked Questions about SOC 2 and ISAE 3402

1. Is SOC 2 mandatory?

No, but many clients require it as proof that you handle their data securely.

2. Is ISAE 3402 only for financial companies?

No, IT service providers and HR service providers also use ISAE 3402.

3. How often should I do an audit?

Usually annually to keep certification valid.

4. Can a company have both SOC 2 and ISAE 3402?

Yes, some companies meet both standards if they manage both IT security and financial processes.

Conclusion

SOC 2 and ISAE 3402 serve different purposes, but both certifications enhance trust in your organization. Choose the standard that best aligns with your industry and clients.