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Compliance audit planning and process: step by step guide


A compliance audit can be a source of stresss for many people, but it doesn’t need to be. This step by step guide outlines how to plan for a compliance audit, questions that may be asked, and what the audit will entail being done – and by whom.
A compliance audit is an inspection that determines whether or not an organization can meet the standards of a particular law, regulation, or standard — and it’s big business! The average cost of compliance for all sectors worldwide is $5.47 million. A compliance audit is usually conducted by an independent third-party auditing company and the auditor will assess an organization’s policies, procedures, and practices to determine if they are compliant with the standards set out by the governing body.

Compliance audit planning and process: step by step

A compliance audit is largely about assessing organizational compliance with internal policies and federal regulations and should be taken seriously by companies of all sizes.

Determine who will do the compliance audit

The first step in performing an annual business compliance audit is to select who will be performing the audit, either internally or externally. The business compliance audit must be conducted by someone with a thorough knowledge of the industry, typically a compliance officer or lawyer. The selected individuals need to have a thorough understanding of the company’s operations as well as its risks and vulnerabilities.

Ensure adherence to current rules and regulations

According to digital archiving professionals at, it’s best when compliance evaluations are made by someone intimately familiar with the industry’s policies, procedures, systems, rules, and regulations. They are done to provide an unbiased evaluation of what is currently working well, what needs improvement, and the risks involved in different areas of the company. This information can then be synthesized into a report that can be used by management to develop plans for improvement.

Preliminary meetings and checklists

During a business compliance audit, the auditor typically will outline the rules and what is expected at the preliminary meeting. The auditor typically also sets up reporting requirements after the meeting has taken place so that they will know what was discussed and agreed upon. The auditor will ask questions like:
  • Is there a board of directors and who is on it?
  • Has the company made any changes to its operations?
  • Who is responsible for managing risk?
  • What are the procedures for reporting an incident?
  • What are the procedures for reporting suspicious activity or transactions?
Auditors may also offer their clients auditing checklists when they are ready to perform the business compliance audit. The purpose of check listing is to make sure that the client complies with all regulations. The checklist will also provide a clear path about what steps need to be taken to reduce risks and comply with regulatory or contractual requirements.

On-site inspections and interviews

To support compliance audit obligations, the auditor may work on-site to inspect papers, go around workspaces, study infrastructure, and security features, and interview management and staff once the business completes audit questionnaires and provides the appropriate documentation. The auditor will examine the business processes and will look for compliance with the requirements set out in legislation, codes of practice, and industry best practice. The auditor will also review documentation, records, policies, and controls to identify any issues or risks that may exist within the company.

Delivery and follow up

The report should be delivered in a reasonable amount of time. The auditor discusses the report with the CEO and other senior management and offers suggestions to address any areas of risk during the final meeting. Regardless of whether they are operating under a regulatory deadline or not, businesses should typically repair any flaws within 120 days to guarantee that the remedial activities are completed. Occasionally, auditing companies provide follow-up assistance to assist corporations in addressing any risks or shortcomings. The measures are subsequently validated and verified by the auditors.


A business compliance audit can help your business to identify potential compliance risks and take the necessary steps to avoid any penalties or fines. A compliance audit is an important part of risk management and it helps to ensure that your company is taking the right measures to reduce exposure to fines and penalties. The goal of a business compliance audit is to identify potential risks, which can be major issues for smaller businesses. Make sure your company is business compliant by using the steps above as a helpful guide.

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