A compliance review is when a company assesses its policies and procedures to ensure that they are following all appropriate regulations. Not only does this ensure that the company is legally compliant, but it helps them to identify and repair problematic situations, effectively minimizing their legal and financial risks.
Read the rest of this article to understand the process of a compliance review, such as what it entails, how it varies from an audit, and if you need a lawyer to help you conduct a compliance review of your business.
When is a Compliance Review Recommended?
There are specific situations in which a compliance review is advised. These include:
- Regulation changes. When rules and regulations change, compliance reviews can help your organization to align practices with the new requirements. It keeps all policies up to date.
- Regulator attention. If your regulators are giving your organization too much attention, such as via inquiries, this is a sign that you could benefit from having a compliance review. It will help you identify and fix any problematic situations.
- Complaints. If you’ve noticed that clients and/or employees are expressing complaints regarding compliance, these are a sign you should conduct a compliance review because something could be lacking.
- Company changes. Various situations can affect your level of compliance, such as mergers. When big changes occur, it’s vital to conduct compliance testing so that you stay aligned with all regulations during the transition.
- Outdated policies. It’s worth checking your organization’s policies from time to time to ensure that they’re updated, especially because it’s common for regulation requirements to change regularly.
What are the Benefits of Compliance Reviews?
Having regular compliance reviews provides many advantages for your organization and staff.
- They give you peace of mind. You’ll know your company is compliant so you don’t have to worry about facing any hard-hitting consequences of non-compliance, such as lawsuits or fees.
- They improve client satisfaction. Your clients want to know your business is legally sound and operating correctly. A compliance review will give your clients the confidence to work with you.
- They help you prevent risks. Having compliance reviews will provide you with key insights to help you avoid risky situations and improve your processes for greater overall success.
What’s Involved in a Compliance Review?
Although the process of a compliance review can vary in different companies and industries, there are some common stages involved.
Define the Scope
There’s usually a scheduled consultation to identify specific concerns you wish to address with the compliance review. This should include clarifying what rules will apply and what departments will be reviewed.
Information Review
You’ll want to review your organization’s documentation, such as its policies, compliance manuals, and financial records. This will ensure that all the company’s documentation is aligned with the required regulations.
The team conducting the review might also speak to personnel to gather information about how compliance is ensured and practiced. This serves to identify any gaps or weak spots in the company.
Risk Assessment
You’ll identify risks related to compliance in the company’s operations so that you can fix any problematic issues or concerns before they escalate. To do this, the review team will compare company practices with legal requirements.
Reports
After the compliance review has been done, a report will be drafted. This is a detailed document that includes insights and recommendations for the company to improve their compliance, with specific, actionable steps to follow.
Follow-up and Support
The compliance team who conducted the review will provide follow-up support so that your company can effectively adopt the changes outlined, such as via employee training or updating company policies. There can also be regular monitoring to ensure that the company is aligned with all compliance regulations.
What’s the Difference Between a Compliance Review and Audit?
There are some important differences between a compliance review and audit. These include the following:
- A compliance review is conducted by the company’s compliance department, whereas an audit is usually performed by an independent party, whether internal or external.
- An audit will focus on where the company is lacking and provide corrective actions to adopt, whereas a compliance review ensures updated, regular compliance practices.
- An audit is scheduled and strict, whereas a compliance review is more flexible. This ensures that companies can use a compliance review to meet their current requirements or concerns.
- An audit is broad in scope, whereas a compliance review is more specific to a specific concern or department.
- An audit’s findings will be reported to the board of directors or senior management, while compliance review results are reported to department heads.
Do You Need a Lawyer for a Compliance Review?
Although hiring a lawyer for your company’s compliance review isn’t always required, it can be beneficial, especially in complex situations.
Generally, you don’t need legal guidance for a compliance review if:
- You’re conducting regular internal compliance check-ups.
- Your compliance review is being conducted by your compliance team, such as internal auditors or officers.
It’s beneficial to work with a lawyer in situations such as the following:
- You’re dealing with challenging-to-understand or changing laws, such as regarding financial regulations.
- You’re reviewing contracts or other legal documents.
- You’re working in a highly regulated industry, such as healthcare or finance.
- You’re concerned about violations being found that will have legal consequences.
How Can a Lawyer Help You with a Compliance Review?
Hiring a lawyer from ContractsCounsel, an online legal network connecting clients with vetted lawyers, can help you navigate a compliance review in your organization in the following ways:
- A lawyer will be able to interpret all the regulations and help you remain legally compliant. These include following all state and local laws, as well as industry regulations.
- They will assess your legal risks and help you ensure you disclose information to regulators.
- They’ll draft and review legal documents, looking for any compliance risks, vague language, or incomplete information.
- They’ll help you review the compliance review report findings so that everyone knows what actions to take.
Do you need a lawyer for a compliance review?
Contact a lawyer on ContractsCounsel today. You’ll work with a vetted lawyer with years of experience in helping clients and organizations remain compliant. This will give you peace of mind, knowing your company is legally sound and avoiding potential risks, while maintaining the quality of your organization’s policies and processes.
