What is a Compliance Review

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What is a Compliance Review?
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Introduction

• In a business climate states are constantly
  trying to heighten efforts to get additional
  revenues, and in that particular scenario
  entities also find themselves facing sales and
  tax audits.
• This results in a deficiency assessment. The
  compliance review can also be known as a
  pre-audit tool as it can detect potential issues
  and corrects any material misstatements right
  before an audit.

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Introduction

• A compliance review includes the following
  things,
• Review the recordkeeping and also the accounting
  methods.
• Review of the taxability issues that are related
  to the goods and services which are sold or
  purchased.
• Review of the sales tax return preparation
  procedure.
• Recommend few changes, if required to current
  processes.
• Estimation of the potential sales tax liability
  exposure which results from an audit.
•  In a compliance audit, what will be reviewed
  will vary greatly depending upon the fact, what
  kind of organization is it that is, whether an
  organization is a private or public company, what
  kind of data is it equipped to handle and how
  does it transmit sensitive data, whether it
  transmits or stores important sensitive financial
  data.

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Introduction

• For example, SOX requirements mean that any
  particular electronic communication needs to be
  backed up and secured with a competent disaster
  recovery infrastructure.
• Healthcare providers particularly that store or
  transmit important e-health records, such as
  personal health information, are subject to HIPAA
  requirements.
• As far as the financial services companies are
  concerned, that transmit credit card data are, on
  the other hand, subject to PCI DSS requirements.
• In each of these cases, the organization should
  be equipped enough to be able to demonstrate
  compliance with the help of an audit trail, which
  is often generated by data coming from event log
  management software.
• By implementing the following basic tips it helps
  produce a compliance quality system as discussed
  below, this will ensure that your high standards
  are accordingly met and maintained

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Introduction

• 1. Report the Quality Assurance
• One way of maintaining compliance quality is
  sending the final report to a reviewer before its
  release. 
• While it may seem an obvious thing to do getting
  your report QA checked is your last resort of
  defence for all your audit reports. 
• This ensures the following things,
• The report is read again from a fresh perspective
  to check spelling and other glaring errors, which
  are easy to overlook when you edit your own work.
• The reviewer can also identify and discuss any
  contentious issues or statements with the auditor
  right before the report is released.

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Introduction

• 2. Peer Review
• Another important step which you can implement is
  peer review. 
• This is one requirement which periodically has a
  report reviewed by a different member of the
  team. 
• The benefits of the peer review are as follows,
• The reviewer can pick up a new approach or
  response to a situation.
• There are chances of a potential discovery of an
  fresh interpretation of a regulation.
• The auditor can consider some of the insights
  that their colleagues may have about the similar
  issues, and offer practical solutions on how to
  improve the report greatly.

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Introduction

• 3. Board Reporting
• Some audit reports, whether good or bad need
  board scrutiny.
• It then becomes essential that the board is kept
  posted about the activities of the compliance
  function with the help of routine reporting on
  audit activities and outcomes.
• The compliance function, and specifically the
  compliance monitoring, should be front and
  centre, particularly in todays board-level
  oversight activities. 
• This has a positive impact as it ensures that
  results are communicated to the highest levels.
• By implementing these simple and effective tips
  to your review process you will persistently be
  able to deliver a high quality standard of
  compliance reporting.

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