Compliance Auditing

A Brief Introduction

Compliance auditing is something business with strict regulatory management systems should be doing regularly. Essentially, compliance auditing review and checks whether a company or organization is in line with the correct regulations. For example, financial institutions and freelancers like banks, freelance accountants, and financial advisors as well as certain solicitors and other consultants need to be up to date with the rules and regulations governing their industries.

What is involved in Compliance Auditing?

Depending on the type of company or organization, different approaches to a compliance audit can be taken. In most cases, a specially trained auditor is assigned to work through a checklist, thus ensuring that all requirements are met and nothing falls short of regulation. For Financial Institutions and Service providers, the audit tends to include information about the security of personal information, disaster recovery, or and information backup. For medical facilities, compliance auditing might require similar points of information while IT consultancies are often subject to queries about processes, data storage, and protection.

Requirements and regulations will differ from country to country and industry to industry. Many governments put compliance requirements in place to protect both industries and their consumers.

In short, the auditor’s report provides determines whether or not the company or organization is in compliance with the applicable rules.

Why is Compliance Auditing Important?

Laws, requirements, guidelines, and regulations are prone to change. Much like everything else in life as it turns out. As these rules change, companies need to adapt their compliances to match or risk losing accreditations and their ability to do business. These rules and regulations are in place to protect consumers and the industries that service them. Ensuring that all providers offer the same standard, both legally and covering all necessary parameters. Failure to comply can lead to all sorts of trouble, including fines and, in the worst case, shutdowns.

Who performs Compliance Audits?

That depends. Some organizations use internal systems to audit their processes and procedures, while others hire third-party auditors to come in and do the work from a clear perspective. In some instances, where the compliance regulations are particularly strict and complicated it pays to have a specialist come in and go through the whole system piece by piece.

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