How often do you see a doctor for a general physical? You wouldn’t want to go years without having a check-up to ensure your overall health. And your business is no different. It’s important to conduct periodic reviews of your company’s practices, procedures, and policies to ensure compliance with the laws and regulations that apply to your industry.
Hiring a business attorney to assist you in this process will not only make your audit more efficient, thorough, and effective, but it also helps ensure that the auditing process doesn’t interfere with your company’s day-to-day operations.
Keep reading to learn more about the benefits of a legal compliance audit and find out how an attorney can help.
What Is a Legal Compliance Audit?
A legal compliance audit involves reviewing your company’s policies and comparing them to established standards that are based on relevant rules and regulations. Compliance audits can cover a broad range of topics depending on your industry, but a typical audit will usually focus on the following four areas:
Labor Laws and Employee Wellness
Labor laws regulate every industry to ensure the safety and wellness of employees. A legal compliance audit will examine whether your company’s policies comply with these laws, and it may also inquire into employee relations, equality, and health programs.
Environmental concerns are critical in the engineering and manufacturing industries, but they affect many other industries as well. Over the last few decades, people have become more aware than ever about environmental responsibility, and the government now has countless laws in place to regulate each company’s impact on our environment.
Ethics and Corporate Governance
Corporate governance pertains to how a company is controlled and how it handles the interests of stakeholders. General business ethics also plays a part in this portion of a compliance audit.
Data security compliance involves ensuring the safety of corporate files and data, including any client information the company possesses. Client data security is extremely important today, and compliance issues regarding client information can result in major setbacks to a company’s finances and public image.
The Benefits of a Legal Compliance Audit
Conducting regular legal compliance audits confers lots of advantages. Besides avoiding costly fines, a regular compliance audit may:
- Boost the performance of employee safety and wellness programs
- Improve morale among your employees
- Enhance your company’s public reputation and public relations practices
- Make your workplace procedures and policies more effective and efficient
- Improve employee retention and help attract talented new employees
- Make your company’s critical data more secure
In addition to helping ensure a healthy environment for your employees and protecting your data, a legal compliance audit can directly save your company considerable money. Unresolved compliance issues can result in lost productivity and revenues, overall disruptions of business, and significant fines and sanctions. In the area of data protection alone, research shows that a single compliance issue can cost nearly three times as much as conducting an audit.
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When Should You Audit?
Can you remember the last time you performed an audit of your business’ compliance? (And not just generally remember — do you remember the exact month and year off the top of your head?) If not, chances are your business is overdue. Although there’s no fixed rule for how often you should perform a general audit, most experts agree you should conduct one every other year at a minimum to monitor the health of your company, stay in compliance, and continue improving processes and practices. Additionally, depending on your company’s industry, there may be regulations that require periodic compliance audits.
A business lawyer with legal compliance experience can help advise you through every step of an audit, including how often to audit and best practices for conducting the audit.
Contact the Law Offices of Kari Santana and Get Help Setting Up a Legal Compliance Audit for Your West Michigan Business
At the Law Offices of Kari Santana, we understand that your business is as unique as you are. With years of experience helping businesses in West Michigan grow and thrive, we can help you set up a customized legal audit to ensure that your business is complying with all state and federal laws that pertain to your industry.
Merkulov, Peter. (2018, March). The true cost of compliance. Corporate Compliance Insights. Retrieved from https://www.corporatecomplianceinsights.com/true-cost-compliance/
The content provided here is for informational purposes only and should not be construed as legal advice on any subject.