Definition - What does Compliance Audit mean?
A compliance audit is a process of comprehensive reviews that focus on an organization’s commitment to a set of regulatory guidelines or its adherence to a specific contract or terms of agreement.
The entity doing the audit may differ according to the nature of the organization and the scope of the audit. It might be done by a public account if finance and assets are concerned, a security expert for security-related compliance audits, or IT consultants for IT infrastructure and other related compliance audits.
Techopedia explains Compliance Audit
A compliance audit will usually be conducted by public accounting firms and certified public accountants are assigned to the case.
Before the audit begins, the auditors will meet with both parties listed in the contract and agreement and the accountants or auditors are given specific instructions or guidelines on what aspects they should check during the compliance audit.
Upon completion of the audit, the auditors will again meet with the involved parties to discuss their findings. Another type of compliance audit is an internal audit which is done to check if the employees and various constituents of the organization are following the standard operating procedures of the organization.
These procedures are in place to ensure that all goods and services being provided by the company meet the same standards. These internal audits are usually for the benefit of the company to help management make intelligent decisions.