Compliance audit is an assessment as to whether the provisions of the applicable laws, rules and regulations made there under and various orders and instructions issued by the competent authority are being complied with. Our audits deal with Workplace safety, Environmental compliance, Legal Compliance, Statutory Bank Audits, GMP etc. What will be audited will depend on the applicable standard or regulations. Here’s an example: Manufacturing companies usually have their management systems based on the ISO 9001 standard. But to get an ISO 9001 certificate or maintain their certification, these companies are required to undergo periodic audits and show consistent compliance.

A compliance audit differs from an internal audit. The former is external, meaning it’s carried out by independent auditors from compliance audit companies or regulatory bodies. These auditors usually follow a checklist based on the compliance audit guidelines of the standard or regulation that’s being assessed. Internal audits are done by staff or employees acting as internal auditors. Their role is to check the state of compliance and ensure the organization consistently follows the standard.

Compliance audits serve a lot of purposes, like:
1. They identify gaps. One of the objectives is to check whether the policies and processes are effective in meeting the compliance requirements. If there are non-compliances, the auditors will note them and report to the organization’s management or to the appropriate government agency.
2. They help in improvement. Once gaps are uncovered, the organization can make improvements by implementing corrective and preventative actions. For example, penetration testing conducted as part of a cyber security audit could reveal that employees are susceptible to social engineering attacks, indicating a need for additional employee cyber security awareness training.
3. They help avoid penalties or legal trouble. This one applies explicitly to mandatory laws, where non-compliance could easily get a company into serious trouble.

There’s no single description of how a compliance audit works, but there are common grounds. First, your organization and your auditing company must set a schedule for the formal audit. On the day of, the auditors will review the documents, processes, and other proofs of compliance. A final report (which includes non-conformances and recommendations) is generated and then presented to your organization. Depending on the level of non-compliance, your organization could face penalties or be given a chance to fix the identified gaps. However, organizations shouldn’t rush towards a compliance audit. Preparation is vital if you want to pass.

Here are a few tips on how to prepare for a compliance audit:

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