Do you need SOC 2 Type 1 before Type 2?
No. The two reports are separate engagements, and neither depends on the other. A Type 1 gives an opinion on control design as of one date. A Type 2 covers design and operation over a period. An auditor will happily issue a Type 2 to a company that has never had a Type 1.
The idea that Type 1 "comes first" is a habit. It started because a Type 1 is the fastest report you can get, so new companies often get it first.
When a Type 1 earns its fee
- A deal is stuck in security review. The buyer needs something signed by an auditor this quarter, and they've confirmed a Type 1 is acceptable for now.
- Your controls are brand new. You rolled out single sign-on and device encryption last month. There is no history to test yet, so design is all an auditor can attest to.
- You want a dress rehearsal with consequences. A Type 1 forces the policies, the system description and the evidence habits into shape before the Type 2 period begins.
- Investors or a board want a milestone. It proves the compliance spend is producing something.
When to skip Type 1
- Nothing is due for six months or more. A three-month Type 2 can exist in roughly the same time, and it's the report buyers wanted anyway.
- Your buyer said "Type 2". Some procurement teams won't accept a Type 1 at all. Paying for one changes nothing.
- Your controls already have history. If they have run properly for months, an auditor can sometimes set a period that starts in the past, as long as the evidence exists for all of it.
- Budget is tight. A Type 1 audit runs about $5,000 to $15,000 at a small firm. That is real money for a report with a shelf life of a year.
Four questions, one answer
Do you need a Type 1: four questions
Skip Type 1. With no deal waiting, put the fee toward your Type 2.
How long does SOC 2 Type 1 take?
Plan on two to three months for a first Type 1 audit: five to seven weeks of evidence collection, about two weeks of testing and two to three weeks for the report, going by one large firm's published estimate. Smaller firms working with well-prepared clients can move faster.
The audit isn't the slow part. Getting ready is. If you have no written policies, no access reviews and laptops nobody manages, expect one to three months of preparation before an auditor has anything to look at.
What do you tell customers while SOC 2 is underway?
You can keep a deal moving without a report, as long as what you say is true. Never describe yourself as "SOC 2 compliant" or "certified" before a report exists. Offer these:
- A dated status letter. State which report you're pursuing, the audit firm you've engaged, and the expected report date.
- Your auditor's engagement letter. It proves the audit is contracted and not just planned.
- Your policies and a completed security questionnaire. Most reviewers want answers more than they want a logo.
- A recent penetration test summary. Independent evidence that carries weight on its own.
- A contract clause. Some buyers will sign with a commitment to deliver the report by a set date.
The middle path most startups take
Get the Type 1, and start the Type 2 observation period the day after the Type 1 date. The work you did for Type 1 carries straight over: same policies, same system description, same controls. The buyer gets a signed report now and a date for the Type 2.
Ask the audit firm to quote both together. You're giving them two engagements, and the second is easier because they already know your system.
With AccuSights: we'll tell you if a Type 1 is a waste of your money. If you do need one, the same evidence and the same engineer carry you into the Type 2 period without starting over.