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Compliance risk is a firm’s potential exposure to serious consequences stemming from a failure to comply with predefined industry rules, regulations, bylaws, internal policies, or prescribed best practices. Compliance risk is also commonly referred to as integrity risk.
Potential consequences of noncompliance can be serious, and may include material loss of assets, legal penalties, or financial forfeiture. Other negative effects include a decline in reputation, valuation, and business opportunities.
Firms of all shapes and sizes—including public, private, for-profit, nonprofit and government organizations—can be subject to contractual or regulatory compliance risk. Organizations governed by industry regulations, or the government itself, are required to follow compliance rules and are therefore subject to risk.
Firms employ numerous risk and compliance tools to stay above board at all times and satisfy compliance requirements. Compliance risk management tools, including compliance risk management software, can drive overall compliance risk management performance—helping firms to navigate and stay on top of new developments within a given industry.
Effective compliance risk assessment tools offer features to help minimize compliance risk. Risk and compliance tools are built to quickly identify violations within a central repository, automatically activate in response to defined events related to risk, and streamline auditing processes by offering predefined compliance risk reports.
Compliance risk is a firm’s potential exposure to serious consequences stemming from a failure to comply with predefined industry rules, regulations, bylaws, internal policies, or prescribed best practices. Compliance risk is also commonly referred to as integrity risk.
Potential consequences of noncompliance can be serious, and may include material loss of assets, legal penalties, or financial forfeiture. Other negative effects include a decline in reputation, valuation, and business opportunities.
Firms of all shapes and sizes—including public, private, for-profit, nonprofit and government organizations—can be subject to contractual or regulatory compliance risk. Organizations governed by industry regulations, or the government itself, are required to follow compliance rules and are therefore subject to risk.
Firms employ numerous risk and compliance tools to stay above board at all times and satisfy compliance requirements. Compliance risk management tools, including compliance risk management software, can drive overall compliance risk management performance—helping firms to navigate and stay on top of new developments within a given industry.
Effective compliance risk assessment tools offer features to help minimize compliance risk. Risk and compliance tools are built to quickly identify violations within a central repository, automatically activate in response to defined events related to risk, and streamline auditing processes by offering predefined compliance risk reports.