A compliance audit is a service with a procedure focused mainly on whether a company complies with local regulations, law, and related rules. Companies face penalties or fines if they don’t comply with their local law and regulations, which may be monetary or not. Compliance audits are normally conducted by an internal auditor or, sometimes, an external auditor—depending on the need. Compliance audits are done against certain requirements, including local law and regulation, business-related regulation and framework, and company policy and procedures. A company performs audits against its local law and regulation to ensure it is operating in compliance with the law and related law. Beyond local legal requirements, a company may also need to review compliance with related frameworks and regulations. If a company is on the stock exchange outside its home country, it needs to ensure it complies with the stock exchange’s requirements.
A compliance auditor can also perform audits against its internal processes, policy, and procedure. This category of compliance auditing is vital to the company’s growth; not complying with internal policy can result in eventual company death. Companies can set up proper auditing departments within their systems or seek a consultant to have their decisions advised.
A compliance audit involves a test of the independent control of the processes and effectiveness of Anti Money Laundering measures. Certain enterprises in the financial business area, like trust offices, are obligated to undergo compliance audits. The auditor will interview relevant employees, consider laid-down facts, and issue their audit report as required. Companies that cannot financially justify having a full-time auditor separate from compliance services are obligated to employ an external auditor.
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