Breaking Down SOC 2 Certification: A Guide to Types 1 and 2 Audits in 2025

In 2025, data security is more critical than ever, and businesses are under immense pressure to ensure their customers’ data is protected. One of the most effective ways to demonstrate your company’s commitment to securing sensitive data is by achieving SOC 2 certification. However, understanding the specifics of the SOC 2 audit process, especially the difference between Type 1 and Type 2 reports, is crucial for businesses seeking certification.

In this comprehensive guide, we’ll break down the two types of SOC 2 audits—Type 1 and Type 2—and help you determine which one is right for your company in 2025. Whether you’re preparing for your first SOC 2 certification or looking to understand what’s involved in maintaining your compliance, Decrypt CPA is here to guide you every step of the way.

What is SOC 2 Certification?

SOC 2 (System and Organization Controls 2) is a set of standards developed by the American Institute of Certified Public Accountants (AICPA) to help businesses ensure that they are managing and protecting sensitive data in line with the five Trust Services Criteria (TSC):

Security

Availability

Processing Integrity

Confidentiality

Privacy

SOC 2 certification is essential for businesses, especially those in the SaaS, cloud computing, and financial services sectors, that handle customer data and need to prove their commitment to data security. Achieving SOC 2 certification not only demonstrates compliance with best security practices but also provides confidence to clients and stakeholders.

At Decrypt CPA, we specialize in guiding companies through the SOC 2 audit process, from initial assessments to final certification.

What’s the Difference Between SOC 2 Type 1 and Type 2 Audits?

The key difference between SOC 2 Type 1 and SOC 2 Type 2 audits lies in the scope and timing of the evaluation. Both types of audits assess your company's security practices against the Trust Services Criteria, but the process and focus are distinct.

1. SOC 2 Type 1 Audit

A SOC 2 Type 1 audit evaluates the design and implementation of your company’s security controls as of a specific point in time. Essentially, it focuses on whether your security practices and controls are well-established and in place.

What It Covers: The auditor will assess your organization’s policies, processes, and systems to determine if they align with SOC 2 criteria.

When It’s Done: A Type 1 audit is performed once and covers a specific date or timeframe, making it a snapshot of your security posture.

Best For: Companies that are newly seeking SOC 2 certification or have recently implemented their security controls. It’s a good starting point for organizations that want to demonstrate that they’ve established their security controls.

2. SOC 2 Type 2 Audit

A SOC 2 Type 2 audit evaluates both the design and the operational effectiveness of your company’s security controls over a defined period—typically 6 to 12 months. This type of audit is more rigorous than Type 1, as it assesses whether your controls not only exist but are also functioning effectively over time.

What It Covers: The auditor examines your security processes and controls and assesses their effectiveness during the review period.

When It’s Done: A Type 2 audit spans a period, typically 6–12 months, and looks at how well your controls performed during that time.

Best For: Companies that have already implemented their security controls and want to show that their measures are working effectively over a longer period. Type 2 audits provide more assurance to customers and stakeholders, as they validate that your controls are continuously maintained and operational.

SOC 2 Type 2 is the preferred audit for most businesses, as it offers a more comprehensive evaluation of your security practices over time, providing stronger evidence of your organization’s commitment to data security.

At Decrypt CPA, we assist businesses in choosing the right audit type and help them prepare for both Type 1 and Type 2 SOC 2 audits. Our expertise ensures that your company is ready for a seamless audit process.

Why Does SOC 2 Certification Matter in 2025?

Achieving SOC 2 certification is more than just a “check-the-box” exercise. In today’s business landscape, it offers numerous benefits:

1. Build Trust with Clients and Partners

SOC 2 compliance demonstrates that your company takes data security seriously, ensuring that your customers’ sensitive information is protected. As data breaches continue to make headlines, companies that can prove they have stringent security practices are more likely to gain the trust of clients, investors, and business partners.

2. Ensure Compliance with Data Protection Regulations

SOC 2 certification can help businesses comply with various global privacy regulations, such as GDPR in the European Union and CCPA in California. By aligning your security practices with SOC 2 criteria, you’ll be well-equipped to meet the requirements of these laws and avoid potential penalties.

3. Enhance Operational Efficiency

The SOC 2 framework requires that your organization maintain effective internal controls, ensuring your processes are both secure and efficient. Regular audits help identify areas for improvement, streamline operations, and reduce risks, leading to better overall business performance.

4. Gain a Competitive Edge

As security concerns become increasingly important to customers, many businesses, especially those in SaaS or tech industries, now require SOC 2 certification from their vendors and partners. Achieving SOC 2 compliance can help set your business apart in a competitive market and open doors to new opportunities.

Steps to Achieve SOC 2 Certification in 2025

Achieving SOC 2 certification—whether Type 1 or Type 2—requires careful planning and execution. Here’s a step-by-step breakdown of the process:

1. Understand SOC 2 Criteria

The first step is to familiarize yourself with the five Trust Services Criteria (TSC): Security, Availability, Processing Integrity, Confidentiality, and Privacy. You’ll need to ensure that your internal processes and controls align with these principles.

2. Perform a Readiness Assessment

Before starting the audit process, it’s a good idea to conduct a SOC 2 readiness assessment. This will help you identify any gaps in your current controls and address potential areas of weakness before the formal audit begins.

At Decrypt CPA, we offer comprehensive readiness assessments to ensure your company is on track to meet SOC 2 requirements.

3. Implement Security Controls

SOC 2 requires that your company implement specific security controls to protect customer data and ensure compliance with the Trust Services Criteria. These include user authentication, encryption, access controls, and incident response planning.

4. Engage a Third-Party Auditor

Once your controls are in place, you’ll need to engage an independent third-party auditor to assess your compliance. The auditor will review your controls, systems, and processes, and provide a detailed report on whether you meet SOC 2 requirements.

5. Address Findings and Maintain Compliance

After the audit, the auditor will provide a report outlining any non-compliance issues or areas for improvement. It’s crucial to address these findings and ensure your security controls are continuously maintained and improved.

How Decrypt CPA Can Help

At Decrypt CPA, we specialize in SOC 2 compliance and certification. Whether you’re preparing for a Type 1 or Type 2 audit, our team of experts will help guide you through the entire process, from readiness assessments to final certification. We ensure your company is prepared to meet the highest standards of data security.

Conclusion

In 2025, SOC 2 certification remains one of the most important ways to demonstrate your commitment to data security. Whether you pursue SOC 2 Type 1 or Type 2, the process ensures that your company is safeguarding sensitive customer data according to the highest standards.

With the help of Decrypt CPA, you can confidently navigate the SOC 2 certification process and gain the trust of your clients and stakeholders. Ready to get started on your SOC 2 journey? Contact us today to learn how we can help you achieve SOC 2 compliance and enhance your company’s security posture.