SOC Report Testing Expectations for a Type 1 & Type 2 Report
SOC testing refers to the procedures an auditor performs to evaluate a service organization’s controls. The scope and depth of SOC testing differ significantly between a Type 1 and Type 2 report — the former focuses on design and implementation, while the latter adds operating effectiveness through random sampling across a defined period.
As discussed in our previous article, SOC 1 and SOC 2 reports can each be issued as a Type 1 or Type 2. A Type 1 report assesses the design of a service organization’s controls, while a Type 2 report assesses the design, implementation, and operating effectiveness of those controls. Organizations preparing for a SOC audit frequently ask: “How will SOC testing and the level of effort vary between a Type 1 and a Type 2 report?” This article answers that question directly.
What Does SOC Testing Involve for a Type 1 Report?
For a Type 1 report, SOC testing determines whether the controls described in the system description are properly designed and implemented. Type 1 testing requires the least amount of effort compared to a Type 2 report.
The auditor will:
- Review the system description and meet with management to validate that the described controls are accurate.
- Request and review policies, user lists, and configurations from monitoring tools and other systems.
- Review a single example occurrence of each control to confirm implementation.
Example — Background Checks: If the system description states that background checks are performed for all new hires, the auditor will confirm the design of this control by speaking with responsible individuals, reviewing governing policies and procedures, and examining one completed background check to validate implementation.
Example — Monthly User Access Reviews: If an organization states it performs monthly user access reviews, the auditor will inquire with management about the process, review the governing policies and procedures, and request a recently completed user access review for in-scope technologies. The review is limited to that single instance, since Type 1 testing covers only design and implementation.
What Does SOC Testing Involve for a Type 2 Report?
For a Type 2 report, SOC testing determines whether controls are properly designed, implemented, and operating effectively over the defined reporting period. Type 2 testing requires a higher level of effort and time than a Type 1 report.
The auditor will:
- Review the system description and meet with management to validate the accuracy of described controls.
- Request and review policies, user lists, and configurations to confirm implementation.
- Randomly sample control occurrences across the reporting period to confirm operating effectiveness. The auditor makes all random selections — the organization cannot dictate which samples are chosen.
Example — Background Checks: Similar to Type 1 SOC 1 testing, the auditor will meet with management and request applicable policies and procedures. In addition, the auditor will examine a sample of new hires across the entire reporting period, rather than a single example. Auditors apply defined sampling methodologies to determine how many instances must be tested based on the total population. The auditor then provides a list of specific background checks to be produced for review, or schedules time to observe each completed background check directly.
Example — Monthly User Access Reviews: The auditor will request the completed user access reviews for in-scope technologies across sampled months — generally two to four months when the report covers a 12-month period. For each sampled month, the auditor confirms that the review was completed and documented for each in-scope technology.
SOC Testing: Key Differences at a Glance
| Factor | Type 1 Report | Type 2 Report |
| What is tested | Design and implementation | Design, implementation, and operating effectiveness |
| Number of samples | Single example per control | Multiple samples across the reporting period |
| Who selects samples | Auditor reviews one example | Auditor makes 100% random selections |
| Level of effort | Lower | Higher |
| Report strength | Foundational | Stronger — preferred by customers and prospects |
The same controls can appear in both a Type 1 and Type 2 report. The key distinction is the volume and depth of SOC testing required. A Type 2 report demands more time and resources because it requires auditors to test operating effectiveness and make random sample selections across the full reporting period. That additional effort produces a stronger report — one that carries more weight with current customers and prospective clients.
For questions about your organization’s SOC reporting requirements, reach out to a member of the Wolf and Company SOC team today.
Frequently Asked Questions About SOC Testing
Q: What is the difference between SOC 1 testing and SOC 2 testing?
SOC 1 testing evaluates controls relevant to user entities’ internal control over financial reporting, while SOC 2 testing evaluates controls related to security, availability, processing integrity, confidentiality, or privacy. Both report types can be issued as a Type 1 or Type 2, and the same testing framework — design, implementation, and operating effectiveness — applies to both.
Q: How many samples does an auditor select for a Type 2 SOC report?
The number of samples depends on the total population of control occurrences during the audit period and the auditor’s defined sampling methodology. For a control that occurs monthly over a 12-month period, auditors typically select two to four months for review. For higher-frequency controls, the sample size will be larger. The auditor makes all selections at random.
Q: Can an organization start with a Type 1 SOC report and move to a Type 2 later?
Yes. Many organizations obtain a Type 1 report first to establish a baseline and validate that controls are properly designed and implemented. After operating those controls for a defined period — typically at least six months — they then pursue a Type 2 report to demonstrate operating effectiveness over time.
Q: What is a SOC 1 report sample in the context of auditing?
In SOC 1 testing, a “sample” refers to the specific transactions, records, or instances the auditor selects to test a control’s operating effectiveness. For example, if testing a monthly user access review, the auditor might sample three out of 12 months of completed reviews. The auditor selects all samples independently.
