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The purpose of a compliance audit is to determine whether the company complies with certain procedures, policies or rules laid down by some higher authority.
In a compliance audit for a private business, accounting staff can determine whether they are following procedures recommended by the company’s manager, reviewing wage rates to ensure compliance with minimum wage laws, or bankers. and are reviewing contract agreements with other lenders.
The company complies with the legal requirements. The audit of government departments such as school districts leads to extensive compliance audits.
Extensive control by top government officials. In almost every private and not-for-profit organization, there may be called for recommended policies, contracts, and legal requirements for audit compliance.
Compliance audit results are typically audited by a single individual within the organization rather than by a wider range of users.
Management, in contrast to external users, is the primary group concerned with the degree of compliance with specific recommended practices and regulations. Therefore, a significant part of this type of work is done by audits conducted by the company.
There are exceptions; When an organization wants to determine whether individuals or companies are obligated to comply with its requirements, the auditor uses the publishing company.
An example is auditing taxpayers in accordance with federal tax laws, where the auditor uses the government to audit tax revenue.
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