Compliance Audit

A compliance audit gauges how well an organization adheres to rules and regulations, standards, and even internal bylaws and codes of conduct. Part of an audit may also review the effectiveness of an organization’s internal controls. Different departments may use multiple types of audits.

Why is compliance audit necessary?

Compliance auditing, whether internal or external, enables a company to identify weaknesses in regulatory compliance processes and create ways for improvement. Sometimes, guidance determined by a compliance audit can help reduce risk while also avoiding potential risks or federal fines for noncompliance.

What is an example of a compliance audit?

Some examples of regulations that may be audited are Health Insurance Portability and Accountability Act (HIPAA), the Chemical Safety Improvement Act (CSIA), and the Emergency Planning and Community Right-to-Know Act (EPCRA). The frequency of compliance audits varies depending on the industry they are conducted in.

What is difference between audit and compliance?

Internal audit considers past events for its reviews, while compliance must be involved before a new product-service or agreement occurs. Internal audit is responsible for global risk management of the company, while compliance is in charge of three main risks: reputational, regulatory and legal.