This question asks us about system and organization control (SOC) audit reports, and this is a topic that’s often tested but students find very confusing. So we’ll break it down for you. First, let’s talk about the difference between SOC 1 and SOC 2 reports. SOC 1 reports focus on controls that are relevant to a service organization’s impact on their clients’ financial reporting. So if you’re dealing with payroll providers or anything that could affect financial statements, SOC 1 is what you’d look for. SOC 2, on the other hand, is designed to evaluate controls related to security, availability, processing integrity, confidentiality, and privacy—basically the kinds of things that are important when you’re thinking about technology services like cloud providers. Since Darlene is concerned about the security of a cloud service, not financial reporting, we can eliminate both of the SOC 1 answers.
So we know that we need a SOC 2 report, but what kind? The difference between Type 1 and Type 2 comes down to what level of assurance we need. A SOC 2 Type 1 report looks at whether the controls are properly designed, but only at a single point in time. It answers the question: “Are the right controls in place?” A SOC 2 Type 2 report goes a step further: it evaluates not only whether those controls but also whether operate effectively over a period of time, like six months or a year. That’s what gives you confidence that the security practices aren’t just theoretical, but are actually working in practice. Since Darlene wants to know both that the controls are appropriate and that they’re operating efficiently and effectively, the best match is the SOC 2 Type 2 report.
