In short
- A SOC 2 report is a CPA firm's opinion on the controls of a service organization. A Type 1 report looks at the design of controls as of one date; a SOC 2 Type 2 report adds whether they operated effectively throughout a period.
- An article in the AICPA's Journal of Accountancy states there is no generally accepted minimum period for a SOC 2 Type 2 report. The period has to be long enough for the auditor to form an opinion, and your buyer decides what it will accept.
- For a 20-person company, the buyer's wording and the deal's timing usually settle the choice. Preparation is the same groundwork either way.
The email usually arrives during a promising deal. A larger customer's security team asks a 20-person Canadian software company for "your SOC 2 report", sometimes adding "Type 2". The founders search for SOC 2 Type 2 and find vendor pages promising a report in weeks. Below: what the two report types are, how the period works and what buyers look at. Facts were checked against AICPA, CPA Canada and ISO sources on 24 October 2026.
What a SOC 2 report is
A SOC 2 report is an attestation report in which a CPA firm gives its opinion on a service organization's controls. The AICPA's guide for these engagements is titled SOC 2 Reporting on an Examination of Controls at a Service Organization Relevant to Security, Availability, Processing Integrity, Confidentiality, or Privacy. Its current edition is updated as of 15 October 2022, reflects SSAE No. 20 and SSAE No. 21, and applies the 2017 trust services criteria (with revised points of focus, 2022).
In Canada, CPA Canada publishes a SOC 2 guide adapted from the AICPA's 2022 version. Its 2024 edition says the engagement is based on Canadian Standard on Assurance Engagements (CSAE) 3000, and that a SOC 2 engagement reports on controls over one or more of five areas: security, availability, processing integrity, confidentiality and privacy. The guide includes illustrative reports issued under Canadian and U.S. standards together.
The result is a report with an opinion, and it carries no certificate. The reader decides what the opinion and its test results mean for them.
SOC 2 Type 1 vs Type 2: the difference
The difference is time. A Type 1 report covers the design of controls as of a specified date; a Type 2 report also tests whether those controls operated effectively throughout a specified period. The Journal of Accountancy, the AICPA's publication, put it this way in 2011: in a SOC 2 Type 1 report the service auditor expresses an opinion on whether the description is fairly presented and whether the controls are suitably designed; a Type 2 report "also includes an opinion on whether the controls were operating effectively", plus a description of the auditor's tests and their results.
Side by side, for a small software company:
- What the auditor looks at. Type 1: your description of the system and the design of your controls. Type 2: the same, plus evidence that the controls ran.
- Time covered. Type 1: one date. Type 2: a period you agree with the CPA firm.
- Tests. Type 1: whether controls are suitably designed. Type 2: operating effectiveness, with the tests and results written into the report.
- What the buyer learns. Type 1: you designed sensible controls. Type 2: you ran them, and any exceptions the auditor found.
- When it fits. Type 1: a first report, a buyer who accepts it for now, controls recently put in place. Type 2: a buyer who asks for it by name, or a renewal cycle with an existing customer.
How long is the SOC 2 Type 2 observation period?
There is no single required length. The 2011 Journal of Accountancy article states: "Unlike SOC 1 reports, there is no generally accepted minimum useful period that a report needs to cover." It lists "determining the time period covered by the report" among management's responsibilities, and adds that "the period covered should be sufficiently long for the service auditor to be able to opine" on operating effectiveness.
Three practical points follow for a 20-person company:
- Ask the buyer first. Their security team may have a view on the period they accept and how recent its end date should be.
- Periodic controls need history. CPA Canada's 2024 guide added guidance on "the operation of periodic controls that operated prior to the period covered by the engagement". If you review user access every quarter or test a restore once a year, the auditor wants to see those events happen.
- The clock starts when controls run. A period cannot begin before the controls exist. Readiness work comes first, then the period, then the CPA firm's fieldwork and report.
Be careful with promises of a fast report. In February 2026 the Journal of Accountancy warned that "a rushed or overly automated report may rely too heavily on inquiry", and that auditors' "independence could be questioned if they agree to unrealistic completion deadlines".
What a buyer actually asks for
A buyer reads a SOC 2 report to decide whether your service is safe to depend on. Expect questions on:
- Type and period. Type 1 or Type 2, and the dates covered.
- Scope. Which product, system and locations the report covers, and whether the service they are buying sits inside it.
- Criteria. Which of the five areas are included; availability or confidentiality matter when the buyer relies on uptime or hands you sensitive data.
- Exceptions. In a Type 2 report, any test where a control did not work as described, and what you did about it.
- The auditor. Which CPA firm signed the report. The AICPA says it assists regulators with referrals regarding unlicensed firms and practitioners.
A 2016 Journal of Accountancy article describes the use of SOC 2 reports as "generally" restricted, so expect to share yours with customers under a non-disclosure agreement. A SOC 3 report is the general-use version: the AICPA guide describes SOC 3 as "general-use reports", and the same article says its distribution "is NOT restricted". The Canadian Centre for Cyber Security's baseline controls ask small organizations to request an AICPA SSAE 18 SOC 3 report from cloud providers, so your customers may ask you too.
Type 1 or Type 2 for a 20-person company
The buyer's request decides most cases. If the contract or questionnaire says Type 2, plan for Type 2 and ask whether a Type 1 report will hold the deal in the meantime. If the buyer simply says "SOC 2", ask which type and which period they expect before you engage a CPA firm.
Some small companies start with Type 1 and move to Type 2 for the next cycle; others go straight to Type 2 because their controls already run. The groundwork is identical: written policies that match how you work, sign-in protection and access reviews, change management, backups with tested restores, vendor oversight, logging and an incident plan.
SOC 2 or ISO/IEC 27001 first?
SOC 2 and ISO/IEC 27001 answer the same buyer worry in different forms. ISO/IEC 27001:2022, published in October 2022, sets requirements for an information security management system, and ISO says a certificate from a certification body whose competence an accreditation body has confirmed "may bring an additional layer of confidence". SOC 2 is a CPA firm's opinion on specific controls, with test results for Type 2.
Choose by audience. If your buyers send questionnaires that name SOC 2, start there. If tenders, partners or overseas customers ask for ISO/IEC 27001, start with that. Most evidence built for one carries into the other: policies, a risk register, access reviews and incident records. Our ISO/IEC 27001 readiness work covers the second path.
Why a contracted team: the risks of going it alone, with a chatbot or a freelancer
The AICPA says it is looking into allegations about a compliance vendor offering SOC services, and that SOC services "should be thoroughly evaluated by service organizations and CPA firms". For a small company the risk is a shortcut report that satisfies a contract today and fails a careful buyer next year.
A chatbot can explain trust services criteria, and it cannot see your cloud console, interview your developers or hold evidence for an auditor. A freelancer may set up good controls, and the evidence trail often leaves with them before the period ends.
A contracted readiness team keeps readiness apart from the audit, works under a scope letter with a fixed scope and price, and hands you everything it produces.
How we help with SOC 2 readiness
Our SOC 2 readiness service helps you choose criteria, report type and system boundaries, assesses your controls against the trust services criteria, closes the gaps, and organizes evidence for the CPA firm you choose. We write security policies for your organization, and our vendor risk work handles the security questionnaires your own suppliers and customers send.
itopsi is a brand of INNOVA CONSULT LTD., a federal corporation in Ottawa. We are not a CPA firm and issue no opinion; the report comes from a licensed CPA firm. The price is fixed in a scope letter after a 30-minute conversation.
Questions founders ask about SOC 2 Type 1 and Type 2
What is the difference between SOC 2 Type 1 and Type 2?
A Type 1 report gives a CPA firm's opinion on your system description and the design of your controls as of one date. A Type 2 report adds an opinion on whether those controls operated effectively throughout a period, and lists the auditor's tests and results. Type 2 shows how the controls behaved over time.
How long is the SOC 2 Type 2 observation window?
An article in the AICPA's Journal of Accountancy states there is no generally accepted minimum period for a SOC 2 Type 2 report. Management sets the period with the CPA firm, and it must be long enough for the auditor to form an opinion on operating effectiveness. Ask your buyer what period and end date they will accept before you choose.
Is SOC 2 mandatory in Canada?
SOC 2 is a voluntary examination. The requirement usually comes from a customer contract, a procurement questionnaire or a partner's security review. Canadian privacy law still expects safeguards for personal information, and a SOC 2 report is one way to show a customer how your controls work.
How long does it take to get a SOC 2 report?
It depends on how many controls already run, the report type and the period. A Type 1 report can follow readiness work directly; a Type 2 report adds the observation period, then the CPA firm's fieldwork and reporting. A readiness assessment gives you a dated plan for your company.
Who performs a SOC 2 audit?
A CPA firm performs the examination and issues the report, under AICPA attestation standards or, in Canada, under CSAE 3000. Readiness help can come from another firm. Keeping the two apart protects the auditor's independence, a point the Journal of Accountancy raised in February 2026.
Leave your name and number on the contact page and a person calls you back the same business day, usually within an hour.
Sources, checked 24 October 2026: AICPA & CIMA, SOC 2 guide page (updated as of 15 October 2022) and SOC suite of services page; CPA Canada, SOC 2 guide page (2024 edition); Journal of Accountancy, "Expanding Service Organization Controls Reporting" (1 July 2011), "Explaining the 3 faces of SOC" (13 June 2016), "Promises of 'fast and easy' threaten SOC credibility" (February 2026); ISO/IEC 27001:2022 page, iso.org; CCCS Baseline Controls V1.2, BC.10.
