A SOC 2 Type 2 report is an independent, third-party audit that evaluates the design and operating effectiveness of a service organization’s security controls over a specific period (typically 3–12 months). Unlike Type 1, which checks controls at a single point in time, Type 2 confirms that security measures (e.g., security, availability, privacy) functioned consistently over time.
SOC 2 Type 2 is an independent audit that evaluates both the design and operating effectiveness of a company's security controls over a specific period, usually three to 12 months. It's based on the AICPA's Trust Services Criteria and assures stakeholders that data is properly protected.
For a Type 1 report, the auditor examines the design of your security controls. For a Type 2 report, the auditor examines both the design of your controls and their operating effectiveness.
Type 2: Includes the same information as a Type 1 report, but also includes the auditor's opinion on the operating effectiveness of the controls that affect the user entities ICFR over a specified period of time.
A type 1 report focuses on the description and design of controls, whereas a type 2 report also covers the operating effectiveness of the controls. This type of report can provide some assurance over the controls which should have operated at the service organisation.
There are four types of audit opinions: unqualified, qualified, adverse, and disclaimer of opinion. Each type reflects a different level of assurance and has distinct implications for the audited entity.
Type 1 events provide additional evidence about conditions that existed at the balance sheet date and require adjustments to the financial statements. Type 2 events are indicative of conditions that arose after the balance sheet date and do not require adjustments but may require disclosure.
A Type 2 report is controls in place over a period of time where the auditor opines on the operating effectiveness of the controls over that period of time in addition to design and implementation of the controls.
The most frequent type of report is referred to as the "Unqualified Opinion", and is regarded by many as the equivalent of a "clean bill of health" to a patient, which has led many to call it the "Clean Opinion", but in reality it is not a clean bill of health, because the Auditor can only provide reasonable assurance ...
A SOC 2 Type 2 report examines how well a service organization's system and controls perform over a period of time (typically 3-12 months). What is their operating effectiveness? Do they function as intended? Type 2 audits can take 12 months to complete and are more expensive than Type 1 audits.
The four common types of auditors are Internal Auditors (evaluate company operations for management), External Auditors (independent review of financial statements for outside parties), Government Auditors (ensure compliance with laws for public agencies like the IRS), and Forensic Auditors (investigate financial fraud for legal proceedings). These roles focus on different areas, from internal controls and risk management to financial reporting accuracy and fraud detection.
2 Type 1 focuses on the design of controls at a specific point in time, while Type 2 examines their operational effectiveness over a longer period. 3 Partnering with experts like IS Partners streamlines the SOC 1 audit process, providing tailored support to achieve compliance and build trust with stakeholders.
Type 1 vs type 2 reports
Both reports come in two options: Type 1: a point-in-time assessment of whether controls are suitably designed. Type 2: a review of both design and operating effectiveness over a defined period (typically six to 12 months).
What is type 2 EPA certification? Type 2 EPA certification qualifies you to handle medium-pressure and high-pressure appliances, which are appliances that contain up to 200 pounds of refrigerant.
A SOC 2 Type II report covers the design and operating effectiveness of the service organization's controls over a period of time. For example, a SOC 2 Type I may assess the service organization's controls as of today, but a SOC 2 Type II assesses the service organization's controls within the past six months.
The four types of audit reports
A Type II report offers a higher level of assurance, as it confirms that the relevant controls were not only properly designed but also operated effectively throughout the 12‑month review period. In 2025, Direct Connect Document Feeds were included within the ASAE 3402 Type II report for data feeds.
A successful internal audit function relies on four fundamental pillars, often referred to as the “4 C's”: Competence, Confidentiality, Communication, and Collaboration. These principles guide auditors in delivering meaningful and impactful results. Let's explore each of these elements in detail.
1) Correspondence Audit
The first of the four types of tax audits are correspondence audits are the most common type of IRS audits. In fact, they comprise roughly 75% of all IRS audits.
The four core types of financial reporting, often called the main financial statements, are the Balance Sheet, Income Statement, Cash Flow Statement, and the Statement of Shareholders' Equity, providing a complete picture of a company's financial health by showing assets/liabilities, profitability, cash movements, and changes in ownership over time, respectively.
Type I error, or a false positive, is the incorrect rejection of a true null hypothesis in statistical hypothesis testing. A type II error, or a false negative, is the incorrect failure to reject a false null hypothesis.
06 Examples of events of the second type that require disclosure to the financial statements (but should not result in adjustment) are: Sale of a bond or capital stock issue. Purchase of a business. Settlement of litigation when the event giving rise to the claim took place subsequent to the balance-sheet date.
A Type 1 report provides coverage over management's assessment and the overall design of controls at a specific point in time, so it specifies if the right controls are in place and if the control processes are properly designed to achieve their purpose.