SOC 2 vs ISO 27001: Which Should Australian Businesses Pursue?

SOC 2 and ISO 27001 are both well-regarded security certifications that demonstrate to customers and partners that your organisation takes information security seriously. But they serve different purposes, are recognised in different markets, and involve very different processes. Choosing the wrong one means investing time and money in a credential that may not open the doors you need.

What is SOC 2?

SOC 2 is an auditing standard developed by the American Institute of Certified Public Accountants (AICPA). A SOC 2 report provides assurance to customers that a service organisation's controls meet the Trust Services Criteria across five categories: security, availability, processing integrity, confidentiality and privacy.

SOC 2 is not a certification in the same sense as ISO 27001 - it is an audit report. A Type I report provides a point-in-time assessment of control design. A Type II report covers a period (typically six to twelve months) and provides evidence that controls operated effectively over time. Type II is considerably more valuable and is what most enterprise customers require.

What is ISO 27001?

ISO 27001 is an international standard for Information Security Management Systems (ISMS), published by the International Organisation for Standardisation. Achieving ISO 27001 certification means an accredited external auditor has verified that your organisation has designed and implemented an ISMS that meets the standard's requirements.

Unlike SOC 2, ISO 27001 is a certification - you either have it or you do not. It is recognised globally and is particularly well understood in Australia, the UK, Europe and Asia-Pacific.

Key differences

• Origin and recognition: SOC 2 is a US standard, primarily valued by North American customers. ISO 27001 is an international standard, well recognised in Australia and globally.
• Output: SOC 2 produces an audit report. ISO 27001 produces a certification.
• Scope: SOC 2 focuses on the Trust Services Criteria for a specific service. ISO 27001 covers your entire ISMS.
• Auditor: SOC 2 is audited by a CPA firm. ISO 27001 is audited by a JAS-ANZ accredited certification body in Australia.
• Ongoing requirement: ISO 27001 requires annual surveillance audits. SOC 2 Type II requires annual re-audits to maintain currency.

Which should Australian businesses pursue?

For most Australian businesses selling to Australian or Asia-Pacific customers, ISO 27001 is the more relevant credential. It is the standard Australian enterprise procurement teams, government agencies and regulated industries ask for. It demonstrates systematic security management in a language the local market understands.

SOC 2 becomes relevant when your customers are primarily in North America. If you are an Australian SaaS company selling into the US enterprise market, your prospects will likely ask for SOC 2 Type II rather than ISO 27001. Many Australian technology companies pursue both as they expand internationally.

Can you pursue both?

Yes - and there is significant overlap in the controls required for both. An organisation that has achieved ISO 27001 certification is well positioned to pursue SOC 2, and vice versa. Many Australian technology companies that serve both local and international markets maintain both certifications.

Find certification consultants on CyberAtlas

CyberAtlas lists Australian GRC and cybersecurity firms with ISO 27001 and SOC 2 experience. Use the directory to find consultants who can advise on which certification is right for your market position and help you achieve it.