What is a SOC 1 report and do I need one?
A SOC 1 is an AICPA attestation on controls that affect your customers' financial reporting. You need one only if your service touches clients' financials, like payroll or billing. Most SaaS companies need SOC 2 instead.
The full answer
SOC 1 and SOC 2 come from the same AICPA family but answer different questions. Both are attestations issued under SSAE No. 18 by a licensed CPA firm. SOC 1 focuses on internal controls over financial reporting, the controls at your company that could flow into your customers' financial statements. SOC 2 focuses on security, availability, and related trust services criteria.
You likely need SOC 1 if you are a payroll processor, a billing or payments platform, a benefits administrator, or any service whose processing lands in a client's ledger. In those cases, your customers' own financial auditors ask for a SOC 1 so they can rely on your controls. If your product does not touch financial reporting, SOC 2 is almost always the report buyers want.
SOC 1, like SOC 2, comes in Type 1 and Type 2 flavors. Per AICPA guidance and market practice, Type 1 covers controls at a point in time and typically takes one to three months, while Type 2 covers an observation window, usually three to twelve months, with three months the shortest window most auditors accept.
Do not buy both by default. Confirm which report your customers actually request, then scope a single engagement. If you are unsure, get a quote describing what your service does and let the auditor confirm whether SOC 1, SOC 2, or both fit.
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Related questions
Can one audit firm do SOC 2 and ISO 27001 together?
Often yes, if the firm holds both a CPA license for SOC 2 and ISO 27001 accreditation, or partners with an accredited certification body. Many providers now run a combined audit that shares evidence and fieldwork to save time.
Do I need both SOC 2 and ISO 27001?
Usually not at first. Most US startups start with SOC 2 to close deals; ISO 27001 matters more for international or enterprise buyers. Many companies eventually hold both because auditors can reuse overlapping evidence.
Do government buyers accept SOC 2?
Sometimes. State and local agencies and government contractors often accept a SOC 2 Type 2, but most federal cloud work requires FedRAMP, and defense contracts increasingly require CMMC. SOC 2 helps, yet rarely replaces those government-specific programs.
Does PCI DSS overlap with SOC 2?
Yes, they share many technical controls — access management, encryption, logging, and vulnerability management — but they don't substitute for each other. PCI DSS is a prescriptive, mandatory standard for handling cardholder data; SOC 2 is a flexible CPA attestation.
Does SOC 2 cover AI and LLM features?
Yes, indirectly. SOC 2 has no AI-specific criteria, but its technology-neutral Trust Services Criteria cover any system in your defined scope — including AI and LLM features — for security, availability, confidentiality, processing integrity, and privacy.
Does SOC 2 help with GDPR?
Partly. SOC 2 is not a GDPR certification, but a report with the confidentiality and privacy criteria demonstrates many security safeguards the GDPR expects. You still need GDPR-specific steps like lawful basis, data subject rights, and processing agreements.
Sources: AICPA SSAE No. 18 attestation standards; AICPA SOC 1 vs SOC 2 guidance. Answer written and maintained by the AuditNex research team; last reviewed July 26, 2026. AuditNex is a marketplace — accredited firms price and scope engagements independently.