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What Is SOC 2?

SOC 2 stands for System and Organization Controls 2. It is a security framework developed by the American Institute of Certified Public Accountants (AICPA) that helps companies prove their systems are secure, available and built to protect customer data.

There's no rigid one-size-fits-all rulebook to follow. Instead you define the controls that make the most sense for your specific business and then demonstrate that those controls are actually working in practice. Understanding SOC 2 Type 1 vs Type 2 for SaaS is one of the first decisions you'll need to make. Type 1 confirms your controls are properly designed at a single point in time while Type 2 proves those controls operated consistently over a period of 6 to 12 months. Most enterprise buyers require Type 2.

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What Is SOC 2 Compliance?

SOC 2, which stands for System and Organization Controls 2, is a framework developed by the American Institute of Certified Public Accountants (AICPA). It defines the criteria for managing customer data based on five Trust Service Criteria: Security, Availability, Processing Integrity, Confidentiality, and Privacy. Unlike prescriptive frameworks such as PCI-DSS, SOC 2 is flexible. It allows organizations to define the controls that are most relevant to their specific business model and then demonstrate that those controls are working effectively.

There are two types of SOC 2 reports. SOC 2 Type I evaluates whether your controls are designed appropriately at a specific point in time. Put simply, it answers the question: do the right controls exist on paper? SOC 2 Type II, on the other hand, evaluates whether those controls are actually operating effectively over an extended observation period, typically six to twelve months. It answers a much harder question: do your controls work, consistently, every day?

For cloud-based companies in 2026, achieving a SOC 2 Type II is widely considered the benchmark for enterprise readiness. It is the report that procurement teams, CISOs, and general counsels at Fortune 500 companies trust, and it is increasingly a prerequisite for closing large deals rather than merely a differentiator.

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SOC 2 Certification and Audit India | KavachOne

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