Compliance Audit

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Compliance Audit Definition

Compliance audit is essentially about comprehensively reviewing whether a company is adhering to the regulatory related guidelines or not. IT, security and independent accounting consultants conduct an evaluation of the thoroughness and strength of preparations pertaining to compliance. Auditors conduct a review of the security related policies, procedures pertaining to risk management and user access controls throughout the compliance audit course.

Thus, a compliance audit helps in determining whether an entity is following all the rules laid down in the contract or agreement or not. Entities enter into agreements or prepare contracts for a number of business related purposes. These contracts and agreements are reviewed carefully and also audited to make sure no misstatements or fraud exists as the entity meets the obligations pertaining to the contract. Accounting entities or a certified public accountant is held responsible for carrying out the compliance audit on company agreements and contracts.

What would be examined during compliance audit largely depends on whether the entity is a private or public company and the data type handled by it and whether it stores or transmits important finance related data or not. For example, healthcare companies that transmit or store records pertaining to e-health such as personal health related information must meet HIPAA requirements. In such a case, the concerned organization must show that it is complying with the regulations.

The compliance auditors usually ask the CTOs, IT administrators and CIOs a number of questions during the audit procedure. These questions typically revolve around the number of users that were added to the organization and which employees left the organization. In addition to this the compliance auditors may also ask the names of the IT administration employees who can access crucial data.

The public accountants are generally provided with an agreement or contact for conducting compliance audit at a meeting that is held between the two parties mentioned in the agreement. During the meeting, accountants are also provided with certain guidelines on what tests they need to conduct at the time of carrying out compliance audit. The moment the audit is over, the public accountants get in touch with the parties to discuss their findings. 

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