What is the difference between compliance and internal audit

Which is Better for Your Company? Partner with Us! Click the button to download your copy of our new whitepaper today! How to Conduct an Internal Financial Audit. Thinking of setting up a business in the Philippines? Find the solution you need in one eBook. Resources Blog Whitepapers Videos. Privacy Policy. At the end of the day, as long as the monitoring is done effectively it does not really matter who does it. These broader responsibilities of compliance also demonstrate that to be effective the compliance function must be both forward and outward looking.

You cannot ensure that processes will be compliant over a period of time if you do not look out for changes. In this way it can help the business adapt to that change as smoothly and in the most cost effective way as possible. So to summarise, compliance is an operational function of the firm. It is there to manage compliance risk and protect the business, but in a pragmatic and risk-based way. Audit is a much more focused business assurance function.

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How can I pay for my course? However, compliance will look at a policy, process and procedure from the lens of regulatory compliance. Does it meet legal obligations? Are laws being followed? Can the organisation meet its regulatory obligations? That said, an audit may, and often does, incorporate aspects of compliance.

While auditing an organisation, areas where compliance obligations have not been met may be identified as these represent significant risks to the business. Have tax returns been lodged? Are the financial reports completed? Compliance is often involved in strategic discussions about where the business is going and what it needs to achieve its objectives in a compliant way.

While audit takes those objectives and looks back to see if they were achieved in the way they were meant to be. Every organisation needs aspects of both audit and compliance. They each play an essential role in the corporate governance of a company and must work together to make sure the organisation is operating effectively. Scroll Down. Back to Blog.