Organizations across industries need to comply with different regulations and standards to strengthen their controls, minimize security risks and vulnerabilities, and improve stakeholder trust. According to Vanta’s 2024 State of Trust report, 65% of organizations say that their stakeholders ask for a demonstration of compliance.
Undergoing a compliance audit, whether mandatory or voluntary, is an excellent way to demonstrate adherence to relevant regulations and industry best practices. Today, compliance audits are not only about preparing a business for external scrutiny but also about fostering a culture of accountability within the organization.
In this guide, we’ll discuss all essential compliance audit concepts, including:
- The types of compliance audits
- Four main stages of the typical compliance audit process
- Top compliance audit best practices
What is a compliance audit?
A compliance audit is a formal assessment of an organization’s policies, procedures, and processes to ensure alignment with external standards, frameworks, regulations, or internal governance guidelines.
The overarching goal of a compliance audit is to ensure the organization follows prescribed laws and industry best practices towards a common goal, which can be to enable a safe and transparent business environment, maintain a specific set of controls, demonstrate trust, etc.
In most cases, the outcome of a successful audit will be proof of compliance from an authoritative body, which can include:
- Certificates
- Reports
- Opinions (qualified or unqualified)
Additionally, compliance audits also help uncover and bridge any gap between your existing operations and compliance requirements.
{{cta_withimage22="/cta-modules"}} | The Audit ready checklist
Why are compliance audits important?
Compliance audits verify whether the organization operates in accordance with the mandated or generally accepted principles and processes. From the industry’s perspective, they protect the organization’s stakeholders from inherent risks (financial, cybersecurity, etc.).
As for individual organizations, completing compliance audits successfully can bring the following benefits:
- Operational continuity: Compliance with the applicable standards and regulations increases an organization’s resilience and improves its long-term business continuity through the implementation of effective controls and governance principles
- Effective risk management: Most regulations aim to improve an organization’s risk management program, so gaps uncovered during compliance audits can serve as evidence to inform risk mitigation strategies
- Increased stakeholder trust: Compliance with relevant regulations demonstrates an organization’s commitment to responsible operations, positioning it as reliable and trustworthy
- Enhanced cybersecurity governance: Security is at the center of many compliance standards and regulations, so proof of adherence serves as assurance that your organization monitors its security posture and can avoid significant incidents
Common types of compliance audits
There can be dozens of variations of compliance audits depending on what your organization needs. They can be broadly classified into the following categories:
- Independent audits
- Accreditation process
- Voluntary and mandatory
1. Independent audits
Depending on who performs the compliance audit and why, audits can be categorized as internal and external. An internal audit evaluates how an organization adheres to their own rules and processes regarding security practices. These can be conducted by a designated internal and independent team or by hiring an external third party. Internal audits can also prepare an organization for an external audit.
The main deliverables of an internal audit include preparing the audit criteria and scope documentation, drafting the audit report (with findings, risks, and recommendations), and briefing the senior management on potential actions.
According to common usage, though, a compliance audit typically means an external audit. This type is either performed by the regulatory body or a designated third party to assess the in-scope controls, processes, or policies against prescribed standards and guidelines. The final outcome of an external compliance audit is typically a document outlining compliance or non-compliance as required by the relevant governing body.
2. Accreditation process
Accreditation compliance audits can also vary according to their requirements, processes and deliverables such as:
- Certification: An accredited third party conducts a formal assessment verifying that an organization meets specific regulatory requirements or industry standards. Upon successful evaluation, the organization obtains a certification as evidence of compliance that’s valid for a specific amount of time
- Third-party attestation: An external auditor verifies the effectiveness of an organization’s security controls against a set of standards
- Point-in-time accreditation: The organization continuously complies with a standard and undergoes audits at specific intervals
We’ve compiled some examples to explain what each accreditation process can entail:
The accreditation types help you anticipate what your audit process will look like and how to prepare for it. Doing so allows you to avoid common misleading marketing practices promoting “certificates” for non-certifiable standards. For example, many organizations offer HIPAA certification, even though there’s no mention of an “official certificate” for compliance.
3. Voluntary and mandatory
According to legal weight, compliance audits can be split into two categories:
- Voluntary: Conducted at an organization’s discretion to assess internal compliance or demonstrate adherence to best practices (e.g.,GDPR, which allows for self-attestation but does not require an external audit)
- Mandatory: Required by external regulations or standards to verify compliance (e.g., ISO 27001, which mandates a formal audit for certification).
Voluntary audits can be conducted at the organization’s discretion, but mandatory audits typically follow a specific frequency (e.g., annually or bi-annually) or must be conducted in response to certain regulatory triggers (e.g., a data breach).
{{cta_withimage3="/cta-modules"}} | The ultimate guide to scaling compliance
4 stages of the compliance audit process
The specific steps of the audit process depend on what type of audit you’re preparing for. Still, the following four stages are common to all compliance audits:
- Research and preparation
- Gap analysis
- Remediation
- Accreditation or formal audit
Stage 1: Research and preparation
Before conducting or undergoing compliance audits, you must understand your compliance requirements and highlight the regulations and standards you must adhere to. This decision will depend on your audit scope which can include several factors, most notably:
- Industry and location
- Risk landscape
- Security posture
- Compliance and growth goals (e.g., you need to follow certain compliances to access new markets)
For example, if you’re in the healthcare sector, HIPAA will likely be the first regulation you’ll focus on. If you serve California residents, you’ll also need to comply with the CCPA. In case you need to demonstrate industry-accepted compliance with privacy and data security standards, you can implement voluntary frameworks like HITRUST.
Once you map your compliance landscape, you’ll work with your compliance team to familiarize yourself with the relevant regulatory obligations and then prioritize them according to criteria such as criticality, impact on your revenue, and resource availability.
Stage 2: Gap analysis
Next, you need to compare your existing controls, processes, and procedures against in-scope requirements. This gap analysis involves various activities, such as:
- Security reviews
- Risk assessments
- Process overviews
- Policy reviews
Gap analysis can entail extensive reviews, which might require considerable resources from your security and compliance team. The best practice here is to consider using compliance automation tools to minimize inefficient processes. You can find a comprehensive trust management platform that streamlines various security and risk workflows and automates repetitive tasks through integrations. Some compliance tools can conduct automated gap analyses and present a real-time picture of your compliance posture.
Stage 3: Remediation
Once you’ve identified all the notable compliance gaps, you should devise a remediation plan that will align your controls and processes with your target standards. If you’re pursuing multiple compliance frameworks, it’s best to identify and track a dedicated remediation plan for each.
Remediation tasks can vary depending on what’s uncovered in the previous step. Some of the common corrective actions include:
- Adding or updating controls
- Updating existing policies or procedures
- Making changes to IT infrastructure
- Assigning task owners and timelines for each task
- Monitoring updates and reporting to stakeholders
If you’re following remediation measures in response to a mandatory compliance audit, you’ll want to keep a trail of the updates implemented as evidence you’ll present during a follow-up audit. This is another area where a dedicated compliance solution can be useful—it can help keep all your security reviews and compliance evidence centralized on one platform, replacing disparate systems like spreadsheets and email chains and reducing your overall preparation time.
{{cta_withimage22="/cta-modules"}} | The Audit ready checklist
Stage 4: Accreditation or formal audit
When you’re satisfied with your compliance posture, you can start the official accreditation process (if relevant for the regulation or certification you’re pursuing). In some cases, the process can include choosing an auditor or planning the accreditation activities to meet specific deadlines.
Some action items to check in this stage include:
- Performing an internal audit beforehand
- Getting all documentation and evidence ready and organizing their accessibility
- Scheduling the audit and drafting a timeline
- Appointing a liaison officer to collaborate with the external auditor
- Allocating team resources to ensure smooth and timely completion of the audit
While internal compliance audits are not formally accredited, you can work with an accredited professional (e.g. a CPA) to receive an audit report with favorable or adverse opinions, depending on the findings of the audit.
4 compliance audit best practices to follow
You can follow these practices to expedite compliance audit cycles for your organization:
- Delegate effectively: Compliance audits and adjacent workflows are extensive and should be the responsibility of a dedicated team to ensure they are prioritized. You’ll benefit from ensuring all relevant processes have task owners to track accountability.
- Create a culture of compliance: Effective compliance audits often require cross-department collaboration and insights from different departments. The best practice here is to foster a culture of ongoing compliance so that everyone is aware of the organization’s overarching compliance goals and can contribute their part.
- Stay on top of regulatory changes: Standards and regulations evolve rapidly, so your current compliance posture will inevitably become outdated. Your compliance team should track all the relevant changes and make the necessary updates to go through audits easily.
- Prioritize self-assessment: Whenever feasible, conduct a self-assessment (or internal audit) before a formal compliance audit to identify and address potential gaps, as well as ensure smoother external audits. You can consider using checklists to standardize the process for your team.
- Leverage automation: Software-supported compliance audits remove manual workflows, such as data collection, analysis, and reporting, and release pressure from compliance teams. For instance, Vanta is one of the most user-friendly compliance automation platforms you can choose if you want to save resources while preparing for complex audits.
{{cta_testimonial1="/cta-modules"}} | Newfront customer story
Complete compliance audits effortlessly with Vanta
Vanta is a robust compliance and trust management platform that automates up to 90% of the compliance tasks related to 35+ leading standards and regulations, including HIPAA, GDPR, SOC 2, ISO 27001, and more. It offers a dedicated automated compliance product with numerous features that streamline the audit process, such as:
- Automated mapping of compliance requirements
- Automated gap analysis and evidence collection
- Hourly tests for a real-time overview of your compliance posture
- Over 375 integrations with major software solutions
- Streamlined policy creation workflows supported by templates
Vanta serves as a centralized platform to plan and execute your audits, reducing the preparation timeline by up to 50%. You can also use the platform as a two-way communication tool to collaborate with your auditor.
Additionally, you can tap into Vanta’s partner network to find security and compliance experts for both internal and external audits.
Schedule a custom demo for a hands-on experience with Vanta.
{{cta_simple29="/cta-modules"}}| Automated compliance product page
Compliance
What is a compliance audit? An extensive guide
Compliance
Organizations across industries need to comply with different regulations and standards to strengthen their controls, minimize security risks and vulnerabilities, and improve stakeholder trust. According to Vanta’s 2024 State of Trust report, 65% of organizations say that their stakeholders ask for a demonstration of compliance.
Undergoing a compliance audit, whether mandatory or voluntary, is an excellent way to demonstrate adherence to relevant regulations and industry best practices. Today, compliance audits are not only about preparing a business for external scrutiny but also about fostering a culture of accountability within the organization.
In this guide, we’ll discuss all essential compliance audit concepts, including:
- The types of compliance audits
- Four main stages of the typical compliance audit process
- Top compliance audit best practices
What is a compliance audit?
A compliance audit is a formal assessment of an organization’s policies, procedures, and processes to ensure alignment with external standards, frameworks, regulations, or internal governance guidelines.
The overarching goal of a compliance audit is to ensure the organization follows prescribed laws and industry best practices towards a common goal, which can be to enable a safe and transparent business environment, maintain a specific set of controls, demonstrate trust, etc.
In most cases, the outcome of a successful audit will be proof of compliance from an authoritative body, which can include:
- Certificates
- Reports
- Opinions (qualified or unqualified)
Additionally, compliance audits also help uncover and bridge any gap between your existing operations and compliance requirements.
{{cta_withimage22="/cta-modules"}} | The Audit ready checklist
Why are compliance audits important?
Compliance audits verify whether the organization operates in accordance with the mandated or generally accepted principles and processes. From the industry’s perspective, they protect the organization’s stakeholders from inherent risks (financial, cybersecurity, etc.).
As for individual organizations, completing compliance audits successfully can bring the following benefits:
- Operational continuity: Compliance with the applicable standards and regulations increases an organization’s resilience and improves its long-term business continuity through the implementation of effective controls and governance principles
- Effective risk management: Most regulations aim to improve an organization’s risk management program, so gaps uncovered during compliance audits can serve as evidence to inform risk mitigation strategies
- Increased stakeholder trust: Compliance with relevant regulations demonstrates an organization’s commitment to responsible operations, positioning it as reliable and trustworthy
- Enhanced cybersecurity governance: Security is at the center of many compliance standards and regulations, so proof of adherence serves as assurance that your organization monitors its security posture and can avoid significant incidents
Common types of compliance audits
There can be dozens of variations of compliance audits depending on what your organization needs. They can be broadly classified into the following categories:
- Independent audits
- Accreditation process
- Voluntary and mandatory
1. Independent audits
Depending on who performs the compliance audit and why, audits can be categorized as internal and external. An internal audit evaluates how an organization adheres to their own rules and processes regarding security practices. These can be conducted by a designated internal and independent team or by hiring an external third party. Internal audits can also prepare an organization for an external audit.
The main deliverables of an internal audit include preparing the audit criteria and scope documentation, drafting the audit report (with findings, risks, and recommendations), and briefing the senior management on potential actions.
According to common usage, though, a compliance audit typically means an external audit. This type is either performed by the regulatory body or a designated third party to assess the in-scope controls, processes, or policies against prescribed standards and guidelines. The final outcome of an external compliance audit is typically a document outlining compliance or non-compliance as required by the relevant governing body.
2. Accreditation process
Accreditation compliance audits can also vary according to their requirements, processes and deliverables such as:
- Certification: An accredited third party conducts a formal assessment verifying that an organization meets specific regulatory requirements or industry standards. Upon successful evaluation, the organization obtains a certification as evidence of compliance that’s valid for a specific amount of time
- Third-party attestation: An external auditor verifies the effectiveness of an organization’s security controls against a set of standards
- Point-in-time accreditation: The organization continuously complies with a standard and undergoes audits at specific intervals
We’ve compiled some examples to explain what each accreditation process can entail:
The accreditation types help you anticipate what your audit process will look like and how to prepare for it. Doing so allows you to avoid common misleading marketing practices promoting “certificates” for non-certifiable standards. For example, many organizations offer HIPAA certification, even though there’s no mention of an “official certificate” for compliance.
3. Voluntary and mandatory
According to legal weight, compliance audits can be split into two categories:
- Voluntary: Conducted at an organization’s discretion to assess internal compliance or demonstrate adherence to best practices (e.g.,GDPR, which allows for self-attestation but does not require an external audit)
- Mandatory: Required by external regulations or standards to verify compliance (e.g., ISO 27001, which mandates a formal audit for certification).
Voluntary audits can be conducted at the organization’s discretion, but mandatory audits typically follow a specific frequency (e.g., annually or bi-annually) or must be conducted in response to certain regulatory triggers (e.g., a data breach).
{{cta_withimage3="/cta-modules"}} | The ultimate guide to scaling compliance
4 stages of the compliance audit process
The specific steps of the audit process depend on what type of audit you’re preparing for. Still, the following four stages are common to all compliance audits:
- Research and preparation
- Gap analysis
- Remediation
- Accreditation or formal audit
Stage 1: Research and preparation
Before conducting or undergoing compliance audits, you must understand your compliance requirements and highlight the regulations and standards you must adhere to. This decision will depend on your audit scope which can include several factors, most notably:
- Industry and location
- Risk landscape
- Security posture
- Compliance and growth goals (e.g., you need to follow certain compliances to access new markets)
For example, if you’re in the healthcare sector, HIPAA will likely be the first regulation you’ll focus on. If you serve California residents, you’ll also need to comply with the CCPA. In case you need to demonstrate industry-accepted compliance with privacy and data security standards, you can implement voluntary frameworks like HITRUST.
Once you map your compliance landscape, you’ll work with your compliance team to familiarize yourself with the relevant regulatory obligations and then prioritize them according to criteria such as criticality, impact on your revenue, and resource availability.
Stage 2: Gap analysis
Next, you need to compare your existing controls, processes, and procedures against in-scope requirements. This gap analysis involves various activities, such as:
- Security reviews
- Risk assessments
- Process overviews
- Policy reviews
Gap analysis can entail extensive reviews, which might require considerable resources from your security and compliance team. The best practice here is to consider using compliance automation tools to minimize inefficient processes. You can find a comprehensive trust management platform that streamlines various security and risk workflows and automates repetitive tasks through integrations. Some compliance tools can conduct automated gap analyses and present a real-time picture of your compliance posture.
Stage 3: Remediation
Once you’ve identified all the notable compliance gaps, you should devise a remediation plan that will align your controls and processes with your target standards. If you’re pursuing multiple compliance frameworks, it’s best to identify and track a dedicated remediation plan for each.
Remediation tasks can vary depending on what’s uncovered in the previous step. Some of the common corrective actions include:
- Adding or updating controls
- Updating existing policies or procedures
- Making changes to IT infrastructure
- Assigning task owners and timelines for each task
- Monitoring updates and reporting to stakeholders
If you’re following remediation measures in response to a mandatory compliance audit, you’ll want to keep a trail of the updates implemented as evidence you’ll present during a follow-up audit. This is another area where a dedicated compliance solution can be useful—it can help keep all your security reviews and compliance evidence centralized on one platform, replacing disparate systems like spreadsheets and email chains and reducing your overall preparation time.
{{cta_withimage22="/cta-modules"}} | The Audit ready checklist
Stage 4: Accreditation or formal audit
When you’re satisfied with your compliance posture, you can start the official accreditation process (if relevant for the regulation or certification you’re pursuing). In some cases, the process can include choosing an auditor or planning the accreditation activities to meet specific deadlines.
Some action items to check in this stage include:
- Performing an internal audit beforehand
- Getting all documentation and evidence ready and organizing their accessibility
- Scheduling the audit and drafting a timeline
- Appointing a liaison officer to collaborate with the external auditor
- Allocating team resources to ensure smooth and timely completion of the audit
While internal compliance audits are not formally accredited, you can work with an accredited professional (e.g. a CPA) to receive an audit report with favorable or adverse opinions, depending on the findings of the audit.
4 compliance audit best practices to follow
You can follow these practices to expedite compliance audit cycles for your organization:
- Delegate effectively: Compliance audits and adjacent workflows are extensive and should be the responsibility of a dedicated team to ensure they are prioritized. You’ll benefit from ensuring all relevant processes have task owners to track accountability.
- Create a culture of compliance: Effective compliance audits often require cross-department collaboration and insights from different departments. The best practice here is to foster a culture of ongoing compliance so that everyone is aware of the organization’s overarching compliance goals and can contribute their part.
- Stay on top of regulatory changes: Standards and regulations evolve rapidly, so your current compliance posture will inevitably become outdated. Your compliance team should track all the relevant changes and make the necessary updates to go through audits easily.
- Prioritize self-assessment: Whenever feasible, conduct a self-assessment (or internal audit) before a formal compliance audit to identify and address potential gaps, as well as ensure smoother external audits. You can consider using checklists to standardize the process for your team.
- Leverage automation: Software-supported compliance audits remove manual workflows, such as data collection, analysis, and reporting, and release pressure from compliance teams. For instance, Vanta is one of the most user-friendly compliance automation platforms you can choose if you want to save resources while preparing for complex audits.
{{cta_testimonial1="/cta-modules"}} | Newfront customer story
Complete compliance audits effortlessly with Vanta
Vanta is a robust compliance and trust management platform that automates up to 90% of the compliance tasks related to 35+ leading standards and regulations, including HIPAA, GDPR, SOC 2, ISO 27001, and more. It offers a dedicated automated compliance product with numerous features that streamline the audit process, such as:
- Automated mapping of compliance requirements
- Automated gap analysis and evidence collection
- Hourly tests for a real-time overview of your compliance posture
- Over 375 integrations with major software solutions
- Streamlined policy creation workflows supported by templates
Vanta serves as a centralized platform to plan and execute your audits, reducing the preparation timeline by up to 50%. You can also use the platform as a two-way communication tool to collaborate with your auditor.
Additionally, you can tap into Vanta’s partner network to find security and compliance experts for both internal and external audits.
Schedule a custom demo for a hands-on experience with Vanta.
{{cta_simple29="/cta-modules"}}| Automated compliance product page
| Role: | GRC responsibilities: |
|---|---|
| Board of directors | Central to the overarching GRC strategy, this group sets the direction for the compliance strategy. They determine which standards and regulations are necessary for compliance and align the GRC strategy with business objectives. |
| Chief financial officer | Primary responsibility for the success of the GRC program and for reporting results to the board. |
| Operations managers from relevant departments | This group owns processes. They are responsible for the success and direction of risk management and compliance within their departments. |
| Representatives from relevant departments | These are the activity owners. These team members are responsible for carrying out specific compliance and risk management tasks within their departments and for integrating these tasks into their workflows. |
| Contract managers from relevant department | These team members are responsible for managing interactions with vendors and other third parties in their department to ensure all risk management and compliance measures are being taken. |
| Chief information security officer (CISO) | Defines the organization’s information security policy, designs risk and vulnerability assessments, and develops information security policies. |
| Data protection officer (DPO) or legal counsel | Develops goals for data privacy based on legal regulations and other compliance needs, designs and implements privacy policies and practices, and assesses these practices for effectiveness. |
| GRC lead | Responsible for overseeing the execution of the GRC program in collaboration with the executive team as well as maintaining the organization’s library of security controls. |
| Cybersecurity analyst(s) | Implements and monitors cybersecurity measures that are in line with the GRC program and business objectives. |
| Compliance analyst(s) | Monitors the organization’s compliance with all regulations and standards necessary, identifies any compliance gaps, and works to mitigate them. |
| Risk analyst(s) | Carries out the risk management program for the organization and serves as a resource for risk management across various departments, including identifying, mitigating, and monitoring risks. |
| IT security specialist(s) | Implements security controls within the IT system in coordination with the cybersecurity analyst(s). |
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