Definition of Risk and Compliance
Compliance as the word per se refers to adherence or complying with some pre decided or set standards. The type of popular compliance is regulatory compliance where it requires the adherence to the regulatory standards or requirements.
For large corporations who also have global operations it becomes really challenging to monitor the adherence to the all for all the locations where the company is into operations also some of the laws have even the impact which might require to close down the business. Most of the places where the company does business need to take permissions or license or other approvals and the approving authority imposes certain conditions or restrictions for continuous compliance. The challenge grows further due to the regulatory changes or the new rules regulations or laws getting incorporated or passed. Adherence to all this is called regulatory compliance.
How compliance is done?
Most of the medium or large corporations do have exclusive compliance department or cell which ensures that the corporation complies with the regulatory requirements on a continuous basis. This ensures that the company doesn’t get caught in regulatory notices or heavy penalties.
What are the Steps in Compliance Program?
Compliance program works through these steps :
1. Defining requirements/Expectations – In this stage the requirements that need to be complied with are identified and laid down clearly. This includes the requirements on the existing laws as well as updating on the new laws or regulations on a regular basis
2. Download/Sharing – At this stage the expectations are shared with people at ground level who need to comply with the requirements through training or other means. They are advised to implement the same at actual operational level
3. Review- Review or Audit is carried out to evaluate that the requirements as downloaded are being followed or implemented on a continuous basis. This would ensure that people are ground level are serious on the compliance as also it would help to identify the gaps if any.
4. Update and upgrade – This stage ensures that the gaps observed during the review are fixed properly and the compliance program is upgraded or updated basis the review as well as any new developments in the compliance requirements
Explain the Necessity of Compliance
Compliance is necessary as this ensures that the corporation is able to meet the statutory requirements and the regulatory authorities are not issuing constant notices or levying heavy penalties due to non compliance. It ensures that the state laws which are made for the benefit of the society. In view of its importance, compliance has become a unavoidable friend and saves huge costs for the company – Payday Loans Near Me