Why compliance audit? What benefits do businesses get from this?
Compliance audits have been very popular in developed countries around the world and are used in many fields and different purposes to assess the extent to which a business complies with rules and regulations, standards, even even the internal regulations of that enterprise. In addition, the compliance audit also considers and evaluates the effectiveness of the enterprise's existing internal controls. That is the first answer to the question of why businesses must audit compliance.
What is compliance audit?
Compliance audit is a series of checks carried out to ensure that your company is meeting the required standards of laws, standards, regimes, policies, etc. that apply to your business.
In other words, it is a way to ensure that the business is doing its job in accordance with the basic required legal standards. The audit is carried out by an independent, unbiased, external party to ensure objectivity and fairness.
Compliance audits assess how well a business complies with rules and regulations, standards, and even internal regulations. In addition, the compliance audit also considers and evaluates the effectiveness of the enterprise's existing internal controls.
Why do businesses need compliance audits?
Compliance audits can help a company identify weaknesses in its regulatory compliance processes and provide solutions for improvement. Advice given after a compliance audit can help a business reduce risk and avoid potential legal trouble or penalties for non-compliance.
Compliance audits are important to businesses because:
- Helps to check compliance with applicable regulations at the enterprise. Compliance with regulations protects employees as well as the business itself from legal risks and penalties for non-compliance, it also makes sure your employees are sure they are working in a safe environment. safe school.
- A good working environment, which brings peace of mind to employees and satisfaction with the quality of work for business owners, must include having a well-functioning internal control system. Compliance audit helps to identify internal audit problems, whether or not the system exists, whether or not the system is effective and how to fix it.
- Non-compliance can cause damage to the company's reputation, which no company wants. Because investors and partners want to work and cooperate with an honest, reputable and reliable company. run the business ethically.
Because otherwise, the bad things arising from the business, more or less, will negatively affect the reputation of investors.
Auditing compliance from financial and accounting regulations, compliance with tax laws to compliance with working processes, compliance with company regulations… helps businesses gain confidence in their internal resources, through Thereby, building a position through the transparency of financial and accounting data, service quality and communication.
- Through consulting from the compliance audit, it can help to solve and heal the pre-existing instability issues at the enterprise and make the relationship of the enterprise with the public and with the State agencies become good. than. Thereby, creating confidence in the public and consumers about the company's good and reliable operation, serving as a bridge for peace of mind to cooperate and transact without any discrimination or limitation. from State agencies.
Prepare for the path of business growth
Many businesses on their development path have been stopped and struggled, taking a long time because of compliance issues. From the very beginning, disregarding the role of compliance and focusing only on rapid growth and scaling, businesses have faced many loopholes from control and disregard for regulations. determined.
When these gaps are large enough and show outward, such as inefficient and cumbersome work management, data on financial statements are not timely, capacity cannot be demonstrated to investors, etc. Just started to re-learn and find solutions. This sometimes leads to loss of investment opportunities, loss of market dominance, as well as difficulty in making urgent decisions. In addition, enterprises also face risks arising from non-compliance such as tax risks, information disclosure risks, management risks, etc.
From compliance with tax regulations, regimes, standards, etc. to compliance with industry and internal regulations, from the very beginning, businesses have been rightly following the frameworks and business orientations. both inside and outside the business. Helping businesses always be in the best state, ready to face all challenges as well as opportunities. Compliance audit is an assistant to help demonstrate the role and prove the vision of business leaders in operating and managing the company.
Compliance testing is important because if your business doesn't meet at least the basic standards, you'll run into major problems for your business and all of your customers. To better understand why a compliance audit is required as well as to discuss problems related to this issue, you can contact Vieter Consulting for answers.
