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Conducting a Compliance Audit

Posted by

Max Khamneian

on 15 Mar 2021

Conducting a Compliance Audit | Skillcast

Compliance audits are critical for businesses to avoid penalties and reputational damage. Learn how to conduct thorough reviews and plug gaps in your controls.

Summary

  1. What is a compliance audit?
  2. Why are compliance audits important?
  3. Benefits of compliance audits
  4. The process behind a compliance audit
  5. Compliance auditing resources

What is a compliance audit?

Compliance audits are checks put in place to ensure that an organisation meets any legal requirements or internal guidelines, such as corporate bylaws, controls and policies. An audit report will cover the strength of compliance preparations, security policies, risk management procedures, and user access controls throughout the audit.

Simply put, a compliance audit will determine whether an organisation is working to a basic required standard. The compliance audit report will fill any gaps in compliance while also making recommendations to resolve any potential issues.

Why are compliance audits important?

Compliance programs are in a constant state of flux 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. 

Benefits of compliance audits

  • Providing a safe working environment and promoting a secure and stress-free workspace
  • Preventing penalties and avoid any legal issues and consequences
  • Establishing a good reputation and gain public trust and dominating your industry by staying aligned with industry protocols
  • Ensuring continuous operation and avoiding disruptions or cessation of operations.

How to Conduct a Compliance audit

1. Select who will be performing the audit.

You may appoint someone from within your organisation, such as a compliance officer. However, if you work for a smaller business with limited resources, you may choose to engage an independent auditor.

2. Initial planning

Before any investigation takes place, the following questions need to be addressed:

  • What risks will your audit address?
  • What was the outcome of any previous compliance audits?
  • Have there been significant changes since the previous audit?

3. Meeting with key stakeholders

Audits may begin with a meeting between senior stakeholders and auditors to outline compliance checklists, guidelines and the audit scope.

4. Evaluating controls

The compliance auditor is responsible for assessing the organisation's tone and risk management culture as well as evaluating and reporting the effectiveness of management policy implementation.

The compliance auditor conducts reviews of employee performance, studies internal controls, assesses documents, and checks compliance in individual departments. If there were an audit of the IT department, members of the C-Suite and IT administrators would be asked questions on what users were added and when, who has left the company and whether their user IDs have been revoked, who has access to critical systems and so on.

5. Evaluating risks

Some organisations have a higher appetite for risk arising from changing trends and business/economic conditions. Therefore, internal auditing techniques have changed from a reactive and control-based form to a more proactive and risk-based approach. The internal auditor can anticipate possible future concerns and opportunities, providing assurance, advice and insight where it is most needed.

6. Analysing operations & confirm information

Achieving objectives and managing valuable organisational resources requires systems, processes and people. Internal auditors work closely with line managers to review operations then report their findings.

The compliance auditor must be well-versed in the organisation's strategic objectives and the sector in which it operates. They need a clear understanding of how any given part of the organisation fits into the bigger picture.

7. Working with other assurance providers

Compliance auditors can work with many assurance providers, including risk management professionals, fraud investigators, quality managers and security experts, to name just a few. This ensures that the board's audit committee receives all the assurance they need to make a truly informed opinion about how well their organisation is run.

It also ensures the optimisation of resources by avoiding duplication and gaps in the provision of assurance. Teamwork and developing effective working relationships are crucial features of compliance auditing.

Compliance Auditing Resources

Checklists are a valuable resource in the compliance audit process. They help to benchmark existing processes and reveal any gaps.

GDPR

GDPR Self-Assessment Questionnaire

Our questionnaire contains 140 checks to help you to assess your GDPR compliance effectiveness. Benchmark your existing processes to identify any missing GDPR procedures and controls.

Financial Crime

Money Laundering Reporting Officer Checklist

We've identified the twenty key areas of responsibility that should fall under the MLRO's remit.

Gifts & Hospitality Checklist

We have created a Gifts & Hospitality Checklist with helpful tips to help your employees understand where bribery starts and goodwill ends. 

Equality & Diversity

E-Learning Accessibility Checklist

Web Content Accessibility Guidelines (WCAG 2.0) stipulate that e-learning content must be Perceivable, Operable, Understandable and Robust (POUR). Our accessibility checklist details the 60 key checks you need to make.

Risk Management

Compliance Continuity Management Checklist

We've produced a 20-point CCM checklist across five critical areas of compliance needing careful consideration during times of disruption.

Business Continuity Management Checklist

What should businesses do to ensure continuity during times of disruption, including global health crises like the Coronavirus pandemic? Use our BCM checklist to benchmark your crisis planning.

Business Travel Risk Assessment

If your employees travel for business, our Business Travel Risk Assessment contains over 200 checks to ensure that they stay safe.

Health & Safety

Return to Work Compliance Checklist

When staff return to the workplace post-pandemic, they need to do so in compliance with the official guidance for working safely in offices. To help we have an RTW checklist.

Working from Home Self Assessment 

And for those working at home, we also have a Working from Home Self Assessment to help ensure your team stay safe, healthy and legally compliant.

Compliance Essentials E-learning Courses

Looking for more compliance insights?

If you'd like to stay up to date with best practices, industry insights and key trends across regulatory compliance, digital learning, EdTech and RegTech news subscribe to Skillcast Compliance Bulletin.

To help you navigate the compliance landscape we have collated searchable glossaries of key terms and definitions across complex topics including GDPR, Equality, Financial Crime and SMCR. We also track the biggest compliance fines, explaining what drives them and how to avoid them.

You can follow our ongoing YouGov research into compliance issues, attitudes and risk perceptions in the UK workplace through our Compliance Insights blogs.

Last but not least, we have 60+ free compliance training aids, including assessments, best practice guides, checklists, desk-aids, eBooks, games, handouts, posters, training presentations and even e-learning modules!

If you've any questions or concerns about compliance or e-learning, please get in touch.

We are happy to help!

Compliance Essentials

Our comprehensive off-the-shelf compliance solution of 30+ in-depth courses and dozens of microlearning modules helps companies from SMEs to global corporates to achieve compliance success.

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