What You Need to Know About Compliance Audits to Avoid a Penalty

Nowadays, every company must go by at least one set of laws or regulations, depending on the type of business they are in. Failing to conduct regular audits puts the company at risk of breaking its compliance obligations. If this happens, there may be regulatory enforcement, including fines and loss of company privileges.

To help you stay compliant and avoid any penalties, we’ll go through the most common types of compliance audits and the top tips to conduct them properly.


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What Are Compliance Audits?

The goal of compliance audits is to formally review or evaluate the organization’s procedures to ensure that it adheres to the relevant industry laws, codes of practice, legislation, and standards. Before successfully conducting a compliance audit, it’s critical to understand the many regulatory compliance audit types and what they entail.

Federal Information Security Management Act (FISMA)

The purpose of FISMA is to safeguard government data and resources from illegal access, use, disclosure, disruption, alteration, or destruction. A FISMA report, the audit’s final product, verifies the fairness and adequacy of the controls over information security and procedures.

Health Insurance Portability and Accountability Act (HIPAA)

The application of this standard ensures the security of information in the healthcare sector. It clarifies the security precautions that medical insurance providers must take on a technical, physical, and administrative level to safeguard, store, and safely transfer patient data.

Payment Card Industry Data Security Standard (PCI-DSS)

The PCI standard was established to ensure that credit card firms handle client data securely. It offers precise instructions on how to manage and store client data.

Systems and Organisational Controls (SOC2) 

Companies that store customer data in the cloud are subject to SOC2 standard, which mandates that they adhere to stringent protocols and controls to guarantee the security of that data.

Sarbanes-Oxley Act of 2002 (SOX) 

According to this regulation, businesses must immediately stop illicit commercial activity. It strongly emphasizes raising the caliber and dependability of business disclosures.

International Organisation of Standardization (ISO) 

To ensure that business processes are standardized, ISO collaborates with more than 160 nations. It assists organizations in managing a wide range of tasks, including quality control, environmental management, and the protection of their assets, including financial data, employee or third-party data, and intellectual property. In addition, an analysis of business practices, technology, and personnel is done as part of an ISO audit’s risk management process.

General Data Protection Regulation (GDPR) 

It’s primarily intended to protect the personal information of EU citizens, but it also applies to all organizations that process that information. A violation of GDPR could incur significant sanctions.

Top Tips on How to Conduct Compliance Audits 

Regardless of the type of business you run, the following advice can help you prepare for a compliance audit and help you avoid expensive penalties.

Do Your Research

Staying ahead of any compliance requirements is the best way to avoid hefty fines. The best course of action is to examine the relevant audits of your particular organization and determine what you must do to comply with the standards. This could be something as crucial as testing and tagging electrical and emergency equipment in the workplace, to ensure the safety of all employees. Ensuring you get a certified company such as Asset Test & Tag to perform the test and tag procedures is an essential requirement for many businesses, in order to stay within compliance guidelines.

Perform Self-Audit

Internal staff can assist in conducting self-audits of your company to help you become ready for external audits. Internal audits can assist your company in streamlining processes and reducing non-compliance risks.

Keep Current With Compliance Regulations

Regulations are constantly changing in response to various circumstances. If your company still abides by outdated regulations, you could face serious problems. However, you could avoid non-compliance risks by keeping an eye out for new rules that apply to your company and ensuring your company adheres to them before an external audit.

Use Advanced Technology 

Tools for managing compliance audits aid companies in effectively managing their audits. Your company may easily control and enhance compliance with cloud-based integrated compliance management software.

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Final Thoughts

Your compliance audit may make or break your business no matter what industry you’re in. The audit examines all aspects of a company’s conformity to legal requirements. In the course of a compliance audit, audit reports assess the robustness and thoroughness of compliance preparations, security policies, user access controls, and risk management practices. Your chances of passing increase when you understand the specifics of which audits relate to your company and ensure that you stay up-to-date with the ever-evolving standards and regulations.