Global data privacy and cybersecurity regulations are becoming more common and stringent. That puts added pressure on organizations to manage their risks appropriately or face potentially painful consequences. In particular, organizations worldwide and across industries are experiencing high demand from regulators to implement different types of risk assessment methodologies.

The most effective compliance risk management programs begin with a compliance risk assessment. A compliance risk assessment can help organizations evaluate all the potential risks related to compliance and then prioritize those risks based on the severity of the possible financial, legal, reputational, and operational consequences associated with each one.

The compliance risk assessment process must be repeatable for compliance officers to compare risks. Many organizations create and use a compliance risk assessment template from scratch to achieve that goal.

This article will look at compliance risk management, specifically compliance risk assessments. Then, we’ll provide instructions for creating a compliance risk assessment template that organizations can use to get started toward worry-free compliance risk management.

What Is a Compliance Risk Assessment?

Generally speaking, the risk assessment process is just one component of an organization’s overall risk management program. It typically includes activities such as risk identification, risk analysis, and risk evaluation.

A compliance risk assessment is a holistic analysis of how your organization might fail to meet its regulatory compliance obligations. The evaluation identifies all the compliance duties that laws, rules, and industry standards impose upon you and how well your existing compliance program does or does not meet those expectations.

What Are the Components of Compliance Risk Management?

As mentioned, a compliance risk assessment is just one process within the overall compliance risk management program. More generally, compliance risk management activities include identifying, assessing, mitigating, and monitoring risks to your enterprise’s compliance with regulations and industry standards.

Remember, however, that compliance and regulatory risks are not the same. Compliance risk is the potential that your organization will be deemed to have violated a law or regulation; regulatory risk is the potential that changes to laws, regulations, or interpretations will result in losses to your organization.

Although these two types of risk are different, you’ll need to consider both as you conduct a compliance risk assessment. While focused on compliance risk, a holistic risk assessment should identify all business activities introducing high risk to your organization and then correlate those areas with all the types of risk they present: compliance, regulatory, financial, reputational, and so forth.

Today, all standards and frameworks recommend a formal risk management program. (Some even require it.) To maintain compliance with a variety of requirements, most organizations must be able to conduct regular risk assessments and produce evidence of that process during a compliance audit.

Many regulatory bodies conduct compliance audits to evaluate the strength and thoroughness of your compliance preparations, policies, user access controls, and risk management procedures to determine whether your organization complies. To prepare for a compliance audit, organizations can first conduct an internal audit to identify compliance gaps that a regulatory body might flag as troubling. Then, you can address those shortcomings first rather than have a regulator impose its remediation plan for you.

A comprehensive compliance risk management program will help your organization document all the potential losses and liabilities your organization could face for noncompliance so that those weaknesses can be remediated according to priority. Throughout the process, your organization will likely collect evidence demonstrating the validity of your risk management program.

Should I Use a Free or Downloadable Compliance Risk Assessment Form?

Compliance with regulations and risk management is paramount in the ever-evolving business and industry landscape. The Compliance Risk Assessment (CRA) is a crucial tool that helps organizations identify, assess, and mitigate potential risks. When creating a CRA, one critical decision is whether to use a free or downloadable premade form or design a custom template tailored to your unique needs.

The Benefits of Using a Premade Compliance Risk Assessment Form:

  • Time and Convenience: Free or downloadable CRA forms can be a quick and convenient solution, ideal for smaller businesses or those with limited resources. They are readily available, requiring minimal effort in terms of design and layout. These forms often come with built-in risk assessment tools and apps, simplifying the business process.
  • Cost-Efficiency: Utilizing a premade form can save your organization money, as you won’t need to invest in the services of a professional designer or risk management consultant to create a custom template from scratch. Many free templates are available in Excel, making it easy for businesses to input their data and assess the risk rating quickly.
  • Established Framework: Many premade CRA forms follow recognized industry standards and best practices. This ensures you have tried-and-true risk assessment methodologies, reducing the chance of overlooking critical compliance aspects. These templates often include predefined hazard identification categories, helping businesses efficiently identify hazards and potential risks.
  • Regulatory Alignment: Some premade forms are specifically tailored to meet the requirements of certain regulatory bodies or industries, making them a suitable choice if your business operates within a highly regulated sector. These templates may also include sections for health and safety compliance, addressing concerns related to first aid, Personal Protective Equipment (PPE), and hazardous substances.

Choosing between using a premade compliance risk assessment form and crafting a custom template depends on your business’s size, resources, and unique circumstances. Smaller companies or those looking for a quick and cost-effective solution may benefit from premade forms, especially those available as free templates in Excel format with integrated risk assessment tools and apps. 

On the other hand, larger or more specialized organizations may find the advantages of custom templates, such as tailor-made precision and long-term adaptability, to be the better choice. Ultimately, the decision should align with your organization’s goals and requirements for effective compliance risk management.

How Do You Write a Compliance Risk Assessment?

According to Deloitte, an effective compliance program should help an organization and its board of directors to understand “the full range of its risk exposure, including the likelihood that a risk event may occur, the reasons it may occur, and the potential severity of its impact. An effectively designed compliance risk assessment also helps organizations prioritize risks, map those risks to the applicable risk owners, and effectively allocate resources to risk mitigation.”

So, how do organizations get started? And how do they build a process that must be repeated regularly? Here’s where a compliance risk assessment template can make itself useful.

Steps to Create a Compliance Risk Assessment Template

Whether you’re overhauling an existing compliance risk management program or implementing a new one, the steps involved in creating a compliance risk assessment template are essentially the same. As you think about your compliance risk assessment process, keep these steps in mind and stay flexible.

Step 1: Set Clear Objectives and Planning

Before diving into the risk assessment process, define the objectives. Consider the overall risk you aim to address: health and safety, gov mandates, or general compliance. Your risk assessment template, a free template, or a risk assessment tool like Excel should encompass these objectives. This helps identify risks and potential hazards in your work environment, shape your safety policy, and decide the risk level to address.

Step 2: Risk Identification and Analysis

Start by identifying risks and hazards in the workspace. A team that includes a risk assessor should be involved in hazard identification, listing potential vulnerabilities and third-party risks, and understanding safety hazards. Use tools like apps, Excel, or a risk assessment matrix template to organize the data. This step is crucial for assessing risks and determining their potential impact.

Step 3: Risk Evaluation and Control

After assessing risks, classify them by their severity using a risk rating system. Here, control measures like PPE come into play. For safety hazards, ensure measures like first aid and other prevention measures are in place. The risk control process also considers potential risks like hazardous substances. The risk management team can then suggest further action to control these risks.

Step 4: Mitigation and Action Plans

Based on the risk rating, decide on mitigation strategies for high-priority risks. Consider integrating a sample risk assessment or even creating a risk assessment form for consistent data collection. This form can be part of a broader risk assessment template available on your company’s internal apps. The mitigation process might include prevention measures, updating the safety policy, or adding specific control measures like PPE against potential hazards.

Step 5: Review and Iteration

Lastly, regularly review your risk assessment process and check for new hazards or changes in the work environment. Utilize feedback mechanisms, such as a government-approved risk assessment tool, to refine your strategies. Whether adapting to new health and safety mandates or updating your Excel risk assessment matrix template, keeping your process current is crucial. Always be ready for further action based on evolving insights.

Manage Compliance with RiskOptics ROAR Platform

Evaluating your risks, implementing the appropriate controls, and gathering documentation every step of the way can be exhausting, not to mention time-consuming – especially if you’re managing your ongoing compliance requirements with a spreadsheet.

RiskOptics ROAR is a compliance and audit management solution that delivers a faster, easier, and brighter path to compliance by eliminating tedious manual processes, accelerating onboarding, and keeping you up-to-date on the progress and effectiveness of your programs. With the ROAR platform, your organization can get audit ready in less than 30 minutes – no coding or cumbersome imports required.

With expert-built preloaded content at your fingertips to make scoping, sending requests, and gathering evidence easier, RiskOptics ROAR can help you reach your goals faster and keep your teams connected. Streamlined collaboration capabilities and automated workflows minimize manual task tracking and eliminate audit fatigue.

Take your compliance to the next level with RiskOptics. Talk to an expert today to learn more about how the RiskOptics Product Suite can help your organization improve its risk and compliance posture.