Compliance Audit – A Must for Businessesadmin
What are Audits and Compliance?
Compliance refers to a company’s conforming to a set of rules, regulations, and standards. They are usually set forth by one or more governing bodies. This is to ensure fair business practices and transparency. There are benefits like avoiding legal or criminal charges, higher productivity, and better public perception. Many companies have taken to adopting compliance as a growth strategy as well. In order to check a company’s compliance, a compliance audit is undertaken.
Types of Audits
Compliance audit: A compliance audit is a comprehensive reviewing of an organization’s workings. It assesses whether an organization is meeting specific criteria or standards that have been set for a process or a business. Audits are generally classified into two major types:
- Statutory audits: In these audits, reports of the current situation of an organization or firm are generated, consolidated, and sent for scrutiny to the government. The government then assesses the working standards of the organization. In these situations, qualified auditors are used. They may be external or independent parties. They are compliance audit solutions.
- Internal Audits: Internal audits are those that are done within the company itself. The company conducts an audit to determine the efficiency of a department or state of its finances and so on. Companies may conduct these with their staff or call for compliance audit solutions. Using data from internal audits, companies make decisions that improve efficiency and better working conditions.
To facilitate and drive the auditing process forwards, managers or auditors use different audit checklists like compliance audit checklist and legal audit checklist. These are tools that are used to review and assess a company’s protocols and other related information to see that they are adhering to set norms. Some of the major areas covered by the compliance audit checklist include:
Compliance Audit Checklist
- Process review
- Internal management
- External/ Socio-environmental factors
- Employee performance
Once the auditors and managers complete their assessment, compliance audit reports are generated. These reports declare whether specific areas in a company or specific criteria are being met. Once these reports are generated, organizations try to implement changes in those specific areas. This helps organizations function more fairly and effectively.
Another audit that is being done by companies to check their practices is internal auditing. It is done to enhance an organization’s operations as well as their value systems. Internal audits are conducted based on certain objectives. Internal audits are carried out by internal auditors.
Critical Audit Areas that Audit Managers Assess:
Operations: The auditor provides objective analyses on the workings of the company. They evaluate whether the company’s operations and working are in line with its objectives, mission, and goals.
Compliance: The internal auditor also works closely at times with external agencies to assess whether the company follows compliances. Reports are then sent to management about areas that may not meet standards and suggestions for change.
Recommendations for better management: An auditor is also tasked to understand and check the current management and control systems. They also check whether the management is functioning in an effective way and provides suggestions for improvement.
Safeguards: Internal auditors also check safety measures a company has in place. Safety measures are safeguards or contingencies a company uses to protect its assets. Auditors check whether they are watertight or whether there are any holes in the existing system. Some of the areas that are checked include financial statements, existing technology, proprietary information, etc.
As mentioned earlier, companies have begun adopting compliance as a growth strategy. This is a step toward a fair and just economy.
TalentPro is one of the best Compliance audit service providers in India. We offer Compliance Audit services to all types of businesses. Outsource your Statutory Compliances to an experienced associate like TalentPro can ensure that you fully complaint in your statutory compliances.