A compliance audit is a comprehensive review of an organization’s adherence to regulatory guidelines.
It evaluate strength and thoroughness of compliance preparations, security policies, user access controls and risk management procedures.
Organizations must be able to demonstrate compliance by producing an audit trail. Which are generated by the data from event log management software, as well as internal and external audits.
Internal vs. compliance audit
- It can be carried out by employees of a company to gauge overall risks to compliance and security.
- It occur throughout the fiscal year and reports can be used by management teams to identify areas that require improvement. Internal audits measure company objectives against output and strategic risks.
- External audit reports measure if an organization is complying with state, federal or corporate regulations, rules and standards.
- An auditor’s report is used by regulators to assess possible fines for noncompliance. An external compliance auditor may use internal audits to further evaluate compliance and regulatory risk management efforts.
Compliance audit procedures
- External audits begin with a meeting between company representatives and compliance auditors to outline compliance checklists, guidelines and the scope of audit. The auditor conducts reviews of employee performance, studies internal controls, assesses documents and checks for compliance in individual departments.
- IT administrators can prepare for compliance audits using event log managers and robust change management software to track and document authentication and controls in their IT systems.
- The growing category of governance, risk and compliance (GRC) software can enable CIOs to quickly show auditors that an organization is compliant, helping it to avoid costly fines or sanctions.
- Auditors then review business compliance processes as a whole and create a final audit report. Compliance auditors provide details to company leaders about the organization’s level of compliance adherence, any violations and suggestions for improvement. Eventually at the end it is released to public.
Importance of compliance auditing
- Compliance auditing, either internal or external, can help a company identify weaknesses in regulatory compliance processes.
- Guidance provided by a compliance audit can help reduce risk, while also avoiding potential legal trouble or federal fines for noncompliance.
- Compliance programs are in a constant state of flux as existing regulations evolve and new ones are implemented.
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