Compliance
SOC 1
Quick definition
Attestation report focused on internal controls over financial reporting (ICFR). Relevant for vendors whose services affect customers' financial statements.
SOC 1 (formerly SSAE 16 / SAS 70) focuses on financial reporting controls, relevant for payroll providers, accounting platforms, transaction processors. Less common than SOC 2 for startups. If your product is part of a customer's financial close (e.g., revenue platform, billing platform), enterprise customers may require it. Otherwise SOC 2 is the right target.
Frequently asked questions
- What is SOC 1?
- SOC 1 (formerly SSAE 16 / SAS 70) focuses on financial reporting controls, relevant for payroll providers, accounting platforms, transaction processors. Less common than SOC 2 for startups. If your product is part of a customer's financial close (e.g., revenue platform, billing platform), enterprise customers may require it. Otherwise SOC 2 is the right target.
- Why is SOC 1 important for startups?
- SOC 1 is a compliance concept that matters for startup founders because it shows up in fundraising readiness, financial decision-making, and operational discipline at the stage where mistakes are expensive to undo. Founders who understand it are better prepared for diligence, board meetings, and investor conversations.
- What category does SOC 1 belong to?
- SOC 1 is a Compliance term in the StartupCFO finance glossary, alongside other compliance concepts that founders, CFOs, and accountants use in startup operations and reporting.
- Where can I learn more about SOC 1?
- Beyond this definition, see the related compliance terms below, or explore StartupCFO's insights and tools that put SOC 1 in context. For specific situations, talk to a fractional CFO who can walk through your numbers.
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