Glossary

Compliance Auditing

Compliance auditing is a systematic and comprehensive process that evaluates an organization’s adherence to established regulations, standards, internal policies, and industry best practices. It aims to make sure that the organization is operating in a way that aligns with legal requirements and ethical guidelines.  

Compliance audits can be internal, where they are conducted by employees of a company to gauge any gaps and risks, or external, where they are conducted by independent third parties to establish whether an organization is complying with national and industry-specific laws and regulations. 

Different Areas of Compliance  

There are several different areas of compliance that are considered during an audit process: 

  • Legal and Regulatory Compliance: Adherence to laws and regulations relevant to the business’s operation. 
  • Data Protection and Privacy Compliance: Safeguarding sensitive information, including personal and financial data, and complying with data protection laws like the GDPR.  
  • Financial Compliance: Ensuring accurate financial reporting, adherence to accounting standards, and compliance with financial regulations such as the Sarbanes-Oxley Act (SOX). 
  • Communications Compliance: Adhering to laws and rules that regulate how organizations can communicate with consumers, what records need to be maintained, and for how long. 
  • Quality and Safety Compliance: Ensuring product quality, workplace safety, and consumer protection. This includes compliance with quality management systems such as ISO 9001 and safety regulations like OSHA. 
  • Industry-Specific Compliance: Complying with specific regulations and standards within industry sectors, such as healthcare (HIPAA), finance (Dodd-Frank Act), or pharmaceuticals (FDA regulations). 

The Importance of Compliance Auditing 

Compliance auditing is critical for several reasons: 

  • Risk Mitigation: Auditing helps identify and mitigate risks associated with non-compliance, protecting the organization from financial losses, reputation damage, and operational disruptions. 
  • Data Security: At a time when data breaches are commonplace and there is growing concern about consumer and employee privacy, compliance auditing helps safeguard sensitive data by testing and enforcing security and data protection standards. 
  • Stakeholder Trust: Demonstrating a commitment to compliance fosters trust among stakeholders, including customers, investors, and regulatory bodies. 
  • Operational Efficiency: Compliance audits often reveal opportunities for process improvement, optimizing operations, and resource allocation. 

Steps to Conducting a Compliance Audit 

Compliance auditing typically follows these steps:
 

Step 1. Establish Audit Objectives: Define the scope, objectives, and areas of compliance to be audited. 

Step 2. Document Standards and Criteria: Determine the specific regulations, standards, and internal policies that serve as benchmarks for compliance, and identify how you will observe them e.g., looking at documents, reviewing records, observing work, etc. 

Step 3. Conduct Audit Procedures: Perform an in-depth examination of processes, records, and controls to assess compliance. This may include interviews, data analysis, and physical inspections. 

Step 4. Identify Non-Compliance: Document any instances of non-compliance, noting the nature of violations and their impact. 

Step 5. Report Findings: Prepare a comprehensive audit report detailing the findings, highlighting areas of non-compliance, and providing recommendations for remediation. 

Step 6. Remediation and Follow-Up: Identify ways to address identified issues and implement corrective actions. Make sure you monitor compliance with these changes. 

LeapXpert: A Critical Partner in Compliance 

LeapXpert is a critical partner in the journey to full compliance. The LeapXpert Communications Platform maintains a complete record of all conversations between enterprise employees and customers to ensure that data privacy and governance standards are met. Integrated with leading third-party archiving, surveillance, and analytics platforms, all messaging records are securely stored and available alongside all the existing business data. Book a demo now.