Compliance Audit
When you own a company, several elements, aspects, and processes will need to take place in order to guarantee that it is going in the right direction. Some of the processes and activities you need to worry about as a company is to ensure that it is following the correct standards and regulations.
Does it meet all the requirements established on them? What is the level of compliance with them?
When a company does not meet all the requirements nor has good compliance with the regulations, it is going directly to its doom due to all the consequences that come with this. Starting with having to invest more time, money, and effort in meeting every single aspect again and going through several audits and processes again. Overall, a company always has to conduct audits from different areas.
If you are not familiar with the process itself, audits can focus on three different objectives, which leads them to divide into 3 different types:
Most companies are familiar with the last one since it consists of assessing and auditing the products of the company itself and its quality. Or auditing other business products to determine if they meet the requirements of the customers—you or someone else. However, you need to get familiar with the system audit since it is the one that focused on analyzing the compliance between the standards you implement and your company.
This type of audit is present in different options in the same area of expertise. This takes us to the main topic and the reason why you are here: A Compliance Audit. You are probably asking what it is all about.
Well, this audit focuses on determining if the company meets all the local laws, regulations, and rules established according to the industry it is part of. Unlike other audits you might be familiar with, which focus on studying and evaluating the degree of conformance with ISO standards, this one is more about regulations and laws. The level of compliance of a company will always vary according to its own statistics and information.
Besides, not all cities in the United States have the same regulations and local laws, which means that you as the company wanting to conduct such an audit needs to be familiar with the ones that apply in your case. Compliance Audits are quite difficult to handle but not because it is hard to understand but rather because of the information it entails.
Just think about it for a second, you have to learn about all the regulations—local and national—in order to follow and meet them. Once you are done implementing and getting certified in each regulation, you need to start conducting the auditing process. It can turn out to be more or less difficult depending on how strict are the regulations for the management systems in a company. And this includes financial, quality, privacy, security, and all the management systems involved in your company.
Who needs to perform Compliance Audits?
All companies need to conduct one at least once a year. To understand why everyone needs to go through this process and why it is necessary to conduct it so frequently, we need to talk about a specific aspect of this audit: the regulations. Regulations tend to be modified or created periodically.
You might find some regulations and rules that were changed 5 years ago and that is still their latest version. But that doesn’t mean all regulations and laws will stay like that. It is not a secret for anyone, and even more for companies, that organizations and entities in charge of developing and reviewing them add more requirements to cover new issues and areas that compromise the entire industry.
Therefore, reading and informing yourself will be two essential things in all this procedure. This takes us back to the main question. Your company will always need to conduct it in order to stay updated with the changes and new or modified regulations and normative.
Otherwise, having problems with the government and laws that regulate the industry and every company that is part of it will come your way without a doubt. So, instead of waiting to handle such problems and issues, you can just start conducting them. However, how can you do it?
The options you have when it comes to handling this process are several. Most companies decide to train their own auditors and experts to conduct and manage the audit program and plan.
In this way, they can keep their information private and there is no need to share it with other auditors or companies. However, this isn’t the best option all the time.
Training workers and people to be part of your team of auditors or even hiring particular and specific ones to conform it can be quite expensive. Besides, you might not be keeping in mind all the expenses that come with creating a new department or area in your business. The meetings that need to take place, and all the resources and time invested in the Compliance Audit alone.
At the end of the day, you will notice it may be a better idea to go for other approaches and options. For example, what about hiring a company that can conduct it for you?
If it is a reliable and qualified one, there is no need to worry about it. Discussing this takes us to another important question you need to answer right now: what are you?
Are you a company that wants to conduct its Compliance Audits? Or are you trying to conduct them for someone else? Maybe both? It is possible if you want to say “yes” to the last option. Whatever your goal is, just keep in mind that you have to stay informed about all the possible approaches and options you have to conduct it.
Who should conduct your audits?
If you are going for the option of conducting Compliance Audits yourself, there is always a rule that applies for not only this but also, internal audits: the person or people conducting it should not be part of the department or area that is being audited. Otherwise, there is the risk that it won’t be independent or objective enough to provide the real results of the auditing process.
Usually, this applies more for internal audits where other elements and aspects of the company are involved, but can also be applied for Compliance Audits. After all, conducting this audit involves studying and analyzing how the company adheres to the rules and regulations as well as standards and codes of conduct.
But in some cases, and if it is necessary, the auditor can also evaluate and review the effectiveness and current status of a company’s internal controls. In this last part, there are several personal affairs involved and this is also why some companies decide to go for a third-party auditor that can conduct it without having a connection to the company itself.
Therefore, here you have several options:
- You can conduct it yourself by training and assigning one of your workers and experts.
- Have someone else do it for you.
- Have a mix of both options: an auditor of your company plus a third-party one.
Since you are here thinking about conducting them yourself or helping other people, you will have to get familiar with all the aspects involved in being able to manage them.
So, start worrying about who you are going to train in your company, if he or she is independent enough, and if the person is familiar with all the regulations and laws.
There is a lot to do, and you also have to worry about the standards that need to be implemented for you to conduct them.
What standards are important to conduct Compliance Audits?
You might be familiar or heard about ISO 9001 before, and if you haven’t, don’t worry, you will get quite tired of it soon enough. This ISO standard provides all the guidelines and parameters for companies with the goal of auditing to learn and understand about audits and the specific one they want to conduct. Usually, people relate ISO 9001 with internal audits only but this standard has all the guidelines for both internal and external audits, and this applies to any type of audit that is conducted inside or outside the company.
In simpler words, you can find all the guidelines regardless of the specific auditing process you are carrying out. Compliance Audits will represent a challenge for you since it isn’t only about learning and implementing this standard but also every ISO related to the regulations and laws your company needs to meet. Also, keep in mind that the regulations you have to meet are not only the local ones.
Some rules and laws are based on an international standard or normative you need to be familiar with as well. So, you summarize everything: you need to read a lot and understand every law and regulation your company is related to. At least, if you want to avoid problems, continue operating, and have a high level of compliance that will open many doors.
How often do you need to conduct Compliance Audits in your company?
At least once a year. This is something we mentioned before but we didn’t go deeper into the actual time you should conduct one. Compliance Audits occur as often as internal ones due to the need of knowing the level of compliance of the company with all the regulations?
Have you been following all the rules so far? Is there one you have missed? Are there new regulations you need to keep up with?
All these questions need to be answered and the only way to do is by conducting an audit quite often. Most companies decide to carry out one whenever there is a modification or new regulation that involves them. However, we encourage companies to do it as often as possible or necessary in order to avoid future issues with any law that you might be missing so far.
If you need assistance or support with all this matter, our company ISO Pros is here to help you with everything you need. Our company is focused on standards, consulting, implementation, and auditing services that include compliance ones. We will help you to keep all the regulations in check and allow your company to meet every ISO standard and normative that applies to conduct them yourself.
Also, to conduct them for others if you are interested in offering this service. There is a lot to do, and you need to focus on both objectives: to plan these audits for your company and someone else’s. To get started, you only need to call, email us, or fill the form we have available below.