How do I prepare for a compliance audit?
Taxes are unavoidable, it is true, and when you get audited, it is important that you are prepared. However, not all audits are directly related to tax dollars. You may have a compliance audit as well. So, how do you prepare for a compliance audit? Well, take a look:
You may be asking yourself if you will you be ready for the regulators. Can you demonstrate regulatory compliance? If no, do the following.
1. Keep policies, procedures and costs under control and be better prepared for a compliance audit by making sure you do all of the following:
- Organize all policies and procedures and keep them all in one place. This will make it easy to find, and change them if necessary. A great place to store such items in an online resource, however, make sure you have backup copies as well.
- Get a programs that will allow you to handle changes effortlessly, and that gives you automatic update alerts so that you can update anything you need to when new standards must be met.
- Cut costs by replacing expensive, error-prone paper-based systems, use an online, or computer based system.
2. Make sure you do comply when you get audited by ensuring that everyone understands that what they need to comply with by doing the following:
- Make it easy for everyone of your people to easily find and follow the latest versions of your policies and procedures. If you update it, send a new copy out, and make sure everyone knows of the changes.
- Assign policies and procedures to specific individuals or teams, make sure that each team is aware of what policies and procedures they need to meet, so come compliance auditing time there are no excuses of ignorance.
- Quickly pinpoint and resolve compliance issues, if you have an organized system, you will be able to see when someone or something does not comply, and you will be able to resolve the issue before it escalates.
3. Prepare for your specific compliance audit by doing the following:
- Gather your proof to demonstrate that policies and procedures have been documented, communicated, and accepted. Having an online or computer system to help you keep track of this makes it much easier to do.
- Throughout the year document proof of procedure completion and variances to standard operating procedures. If you can do this on an automated system, come audit time it will be as easy as clicking a few buttons to get to.
- Create ready-to-run reports for audits or internal review that you can simply print should you be audited. This is easiest using a compliance computer system or online system.
A compliance audit is basically a way for a company owner to ensure that their company is financially healthy and operating the way that it should be, with little waste. So, make sure you as a manager are ready for a compliance audit by documenting any variations to the norm, and by accounting for all issues and showing that standards or cost and quality are being met. Because the process of preparing for a compliance audit really takes all year, it is best to get a computer based system to keep track of everything for you, rather than have to wade through mounds of paperwork come audit time. Instead you can simply print and staple a full report that is gathered and complied throughout the year. Just like with your taxes, if you keep track of everything all year, then you won't have to sort through your receipts in your shoe box when you tax time comes. Be a little more sophisticated, use technology to iron out the process.