A compliance audit is a comprehensive review of an organization’s adherence to regulatory guidelines. Audit reports evaluate the strength and thoroughness of compliance preparations, security policies, user access controls and risk management procedures over the course of a compliance audit.
What precisely is examined in a compliance audit varies depending on whether an organization is a public or private company, what types of data it handles, and if it transmits or stores sensitive financial data. 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
Internal vs. compliance audit
Internal audits are carried out by employees of a company to gauge overall risks to compliance and security and to determine whether the company is following internal guidelines. Internal audits occur throughout the fiscal year and reports can be used by management teams to identify areas that require improvement. Internal audits measure company objectives against output and strategic risks.
External audits are formal compliance audits that are carried out by independent third parties and follow a specific format that is determined based on the compliance regulation being assessed. External audit reports measure if an organization is complying with state, federal or corporate regulations, rules and standards.
