A compliance audit is a comprehensive review of an organisation’s adherence to the relevant regulatory guidelines. Audit reports evaluate the strength and thoroughness of compliance preparations, security policies, user access controls and risk management procedures over the course of a compliance audit.
At its core, a compliance audit evaluates whether an organisation is following specific rules or standards. These may be imposed by government regulatory bodies pertaining to privacy, taxation, IT security issues, health and safety standards, or environmental protection.
Compliance auditing is mainly used to evaluate whether the organisation is following external regulations, but it can also be used to determine whether a subsidiary organisation follows the wider organisation’s procedures and policies.
Compliance auditing helps ensure an organisation is not operating outside the relevant legal or financial guidelines and enables it to put controls in place to detect future problems while creating a record of accountability.
Compliance programs are constantly evolving as existing rules are updated and new regulations are introduced. Auditing provides an outline of internal business processes that need to be changed or improved to ensure compliance with regulations and requirements. Key areas to consider are the security of sensitive data, financial reporting, payroll, HR policies, management standards, health and safety.