Conducting a Compliance Audit

Posted by

Hari Gupta

on 13 Jan 2023

Regular compliance audits are key to avoiding penalties and reputational damage. We explain the benefits, the process and how to quickly spot gaps.

Conducting a Compliance Audit | Skillcast

About compliance audits

  1. What is a compliance audit?
  2. Why are compliance audits important?
  3. What are the benefits of compliance audits?
  4. How do you conduct a compliance audit?
  5. Where do you find compliance auditing resources?

Compliance Challenges 2023

1. 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.

2. 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. 

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3. What are the benefits of compliance audits?

4. How do you conduct a compliance audit?

a. Decide who will perform 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.

b. Initial planning

Before any investigation takes place, you need to address some key questions:

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

c. Meet with key stakeholders

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

d. Evaluate existing processes & 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.

e. Assess 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.

f. Analyse 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 and 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.

g. Consider external resources needed

Compliance auditors may work with many assurance providers, including risk management professionals, fraud investigators, quality managers and security experts, to name just a few.

It can ensure 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.

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5. Where do you find compliance auditing resources?

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

Data Protection

Our GDPR self-assessment 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.

Equality & Diversity

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.

Financial Crime

Ensure that there are no gaps in your AML processes with the help of our MLRO Responsibilities Checklist detailing key areas of the MLRO's remit.

To reduce the risks of bribery and corruption, our Gifts & Hospitality desk aid will help your employees understand where bribery starts and goodwill ends.

Health & Safety

With hybrid working becoming the norm, staff need to be compliant with the official guidance for working safely under this policy.

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

Modern Slavery

Large businesses across the UK must carry out the necessary due diligence in their own company and supply chains to help combat modern slavery and human trafficking.

Under Section 54 of the Modern Slavery Act (MSA), companies with an annual turnover of £36m or more must publish a Modern Slavery Act Statement at the end of each financial year, covering their own business and supply chains.

To help, we have a Modern Slavery Audit Checklist.

Risk Management

During times of disruption, it is easy to lose focus, and things slip through the cracks. Our 20-point Compliance Continuity Management checklist across five critical areas of compliance needing careful consideration.

Beyond compliance,  how can you plan ahead to ensure your business-critical functions are resilient to crises like the pandemic? Our Business Continuity Management checklist to benchmark your crisis planning.

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

Compliance Essentials E-learning Courses

Looking for more compliance insights?

We have created a series of comprehensive roadmaps to help you plan and execute compliance in your organisation.

Our best-selling Compliance Essentials Library and award-winning LMS provide a one-stop compliance training solution, including compliance refresher courses.

And our searchable compliance glossaries explain key terms and regularly report on learnings from the largest compliance fines resulting from regulatory breaches.

We also have 100+ free compliance training aids, including assessments, best practice guides, checklists, desk aids, eBooks, games, posters, training presentations and even e-learning modules!

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

Last but not least, you can interact in person with thought leaders and your peers at one of our popular live webinars and face-to-face events.

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

We're happy to help!

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