Compliance risk assessments are vital to maintaining compliance with regulatory requirements. Failing to comply with regulations—and getting caught—can be brutal for an organization, resulting in fines and penalties. To avoid this, regular compliance risk assessments are necessary to identify inherent risks within the organization and devise a plan to mitigate those risks.
A compliance risk assessment varies from other types of risk assessment. For example, it looks less at financial statement risks, like those in internal audit risk assessments, and strategic risks, like those in enterprise risk assessments. Instead, a compliance risk assessment focuses largely on legal and policy non-compliance or ethical misconduct.
To perform an effective compliance risk assessment, ensure that the performer fully understands the regulations for your industry.
A quality compliance risk assessment relies on a strong framework with clear, organized risk domains. Note that compliance risk isn’t a reflection of an individual’s or team’s performance—it’s a thorough understanding of the services and products offered and the processes used.
An effective compliance risk assessment will allow you to allocate resources to effectively mitigate the inherent risks present within your organization.
JURCOM’s approach to risk assessment: