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SOC 2 Type 1 vs Type 2: Key Differences for Australian Organisations
First Published:
September 20, 2025
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Small & Medium Businesses
Large Organisations & Infrastructure
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Australian organisations preparing for SOC 2 often face an early and important decision: whether to pursue SOC 2 Type 1 vs SOC 2 Type 2. While both reports demonstrate a commitment to data security and customer trust, they provide very different levels of assurance and serve different commercial purposes. SOC 2 is also regularly referred to as SOC2.
This article explains the difference between SOC 2 Type 1 vs Type 2, also referred to as Type I vs Type II, and outlines when each approach makes sense for Australian organisations. It also explains how SOC 2 fits within the Australian compliance landscape alongside ISO 27001 certification and the Essential Eight maturity model.
In practice, many organisations engage SOC 2 audit services early to clarify which report aligns best with customer expectations, sales timelines and internal maturity.
What is SOC 2?
SOC 2 (SOC2) is an assurance framework developed by the American Institute of Certified Public Accountants (AICPA). It assesses how effectively an organisation protects customer data across five Trust Services Criteria: security, availability, processing integrity, confidentiality and privacy.
Although SOC 2 is not mandated by Australian regulators, it has become a de facto requirement for organisations selling into global enterprise markets. As a result, Australian organisations across technology, financial services, professional services and managed service environments increasingly rely on SOC 2 to demonstrate credible security governance.
SOC 2 Type 1 explained (Type I)
A SOC 2 Type 1 report assesses whether your controls are designed and implemented appropriately at a specific point in time.
Auditors evaluate whether policies, procedures and controls exist and are suitably designed. However, they do not test whether those controls operate consistently over time.
SOC 2 Type 1 is commonly used by:
- Startups and growing organisations that need assurance quickly
- Australian organisations entering international or enterprise markets
- Teams using Type 1 as a readiness milestone before progressing to Type 2
Because Type 1 focuses on control design rather than execution, it is typically faster and less costly. However, it provides limited assurance for customers with higher risk tolerance.
Many organisations complete a structured readiness phase supported by SOC 2 readiness assessments to ensure the Type 1 report reflects a stable and defensible control environment.
SOC 2 Type 2 explained (Type II)
A SOC 2 Type 2 report goes further by evaluating whether controls operate effectively over a defined review period, usually between six and twelve months.
Auditors test real operational evidence, such as access reviews, logging records, incident reports, change approvals and security monitoring outputs. As a result, Type 2 provides significantly stronger assurance to customers and procurement teams.
SOC 2 Type 2 is typically required when:
- Selling to large enterprises or government-aligned customers
- Operating in regulated industries such as financial services or healthcare
- Competing against vendors that already hold Type 2 reports
Because evidence must be maintained continuously, many organisations rely on managed compliance services to centralise evidence, schedule reviews and reduce operational burden during the audit period.
SOC 2 Type 1 vs Type 2: key differences
SOC 2 Type 1 vs Type 2: key differences
| Aspect | SOC 2 Type 1 | SOC 2 Type 2 |
|---|---|---|
| Focus | Control design | Control design and operating effectiveness |
| Timeframe | Point in time | Continuous review, typically 6–12 months |
| Evidence | Policies and control descriptions | Logs, records, approvals and operational proof |
| Audit effort | Faster and lower cost | Higher effort with ongoing evidence collection |
| Assurance level | Baseline assurance | Strong, enterprise-grade assurance |
| Typical use case | Early assurance or readiness milestone | Enterprise, regulated and global customers |
| Market expectation | Sometimes acceptable | Often required |
Choosing between SOC 2 Type 1 and Type 2
Choosing between SOC 2 Type 1 vs Type 2 should be driven by customer expectations, organisational maturity and sales strategy.
Early-stage or resource-constrained organisations often start with Type 1 to demonstrate intent and structure. In contrast, mature or regulated organisations typically require Type 2 to meet procurement and assurance standards.
Export-focused organisations selling into the US or Europe almost always require Type 2.
Before committing to either report, many Australian organisations conduct a readiness phase. Those already investing in ISO 27001 certification or uplifting Essential Eight maturity often progress to Type 2 more efficiently because governance foundations are already in place.
SOC 2 in the Australian compliance landscape
Although SOC 2 (SOC2) originated in the United States, it aligns well with Australian security expectations when integrated correctly.
Common approaches include aligning SOC 2 with ISO 27001 certification Australia for governance and risk management, using the Essential Eight maturity model to strengthen technical controls, and leveraging managed compliance services to support continuous evidence collection.
By mapping frameworks together, organisations reduce duplication, lower audit costs and strengthen overall resilience.
Practical recommendations for Australian organisations
Use SOC 2 Type 1 as a stepping stone when speed to market is critical, but plan for Type 2 as the end goal.
Align SOC 2 controls with ISO 27001 and Essential Eight to avoid duplicated effort.
Use managed compliance services to support Type 2 evidence requirements without overloading internal teams.
Validate control effectiveness through penetration testing before entering a Type 2 audit window.
Frequently asked questions
What is the difference between SOC 2 Type 1 and Type 2?
Type 1 evaluates control design at a point in time. Type 2 evaluates design and operating effectiveness over an extended review period.
What’s the difference between SOC 2 and SOC2?
No difference, they both refer to the same standard.
Is SOC 2 Type 1 enough for enterprise customers?
Sometimes, but many enterprises require Type 2, particularly in regulated or high-risk environments.
Is SOC 2 mandatory in Australia?
No. However, it is increasingly required by global and enterprise customers.
Next steps
Both SOC 2 Type 1 and Type 2 play important roles in building customer trust. The right choice depends on your organisation’s maturity, risk profile and commercial goals.
CyberPulse supports Australian organisations through SOC 2 audit services, SOC 2 readiness assessments, ISO 27001 certification support, Essential Eight uplift, penetration testing, and managed compliance services. Speak with our team to determine the most effective SOC 2 pathway for your organisation.
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