What is Compliance Reporting?

Companies are required to comply with laws, rules, and regulations set by government agencies and regulatory bodies. Businesses that don’t comply are subject to penalties that can include monetary fines, disbarment from government contracts, and imprisonment for offending executives. The most effective way for an organization to get a clear understanding of its compliance efforts is through regular, in-depth compliance reporting.

Compliance reporting shows management where its compliance efforts are effective, and where more work is needed. Executives can then use this information to make better decisions about risk management, how to allocate resources, and planning for the future.

What regulations or standards require compliance reporting? Lots: the PCI-DSS standard to protect credit card information, the HIPAA standard for personal health information, and Europe’s GDPR standard to protect personal data, to name only a few.

Preparing these reports can take considerable time and effort. Automating the reporting process, however, reduces human error and allows continuous compliance with real-time monitoring and alerts for regulatory compliance risks.

Understanding Compliance Reporting

Compliance reporting is an ongoing process of creating and submitting reports proving your organization’s adherence to applicable laws, regulations, and standards.

It details the organizational activities and practices in areas such as workplace safety, data privacy, financial accounting, environmental impact, and ethical conduct, and more. Compliance reporting is often mandated by regulatory bodies, industry associations, and other entities that oversee activities in a particular jurisdiction or niche.

In some cases, failure to submit the required reports or to demonstrate compliance can result in hefty penalties, fines, or legal action.

What is a Compliance Report?

A compliance report is documented evidence that serves as proof that your organization complies with the specific requirements and standards set by the government and other regulatory agencies.

The contents of a compliance report varies depending on the specific requirements of the regulatory body or organization requesting it. Most reports, however, include the following information:

• Policies and procedures
• Risk assessments
• Monitoring and controlling activities
• Incidents or violations during the reporting period, if any

In addition to serving as conclusive proof to auditors and regulatory bodies, a compliance report is also useful for making informed decisions about risk management, resource allocation, and other measures to assure compliance effectiveness.

Benefits of Compliance Reporting

Compliance reporting shows you what your team is doing correctly and highlights areas that need improvement to avoid penalties, reputation loss, fines, or even business closure.

Other benefits of effective compliance reporting include:

• Greater peace of mind. Compliance reporting demonstrates adherence to applicable regulations, laws, and standards. It provides concrete evidence of compliance, helping your company to avoid penalties and giving you greater peace of mind.
• Improved performance. Compliance reporting provides insights into how your business is performing in areas such as workplace safety, environmental impact, and business finances. You can use this information to identify areas for improvement and then implement changes.
• Greater client assurance. Accurate compliance reporting gives your business a reputation for transparency, ethical behavior, and social responsibility. That, in turn, instills greater confidence and trust among your clients, making them more likely to work with you in the future.
• Risk mitigation. Compliance reporting brings problematic parts of your business to light; you can then take measures to reduce the risks in those areas. Strong compliance reporting also helps to assure consistency in policies and procedures, which can reduce the risk of breaches and enhance the overall effectiveness of your compliance program.

How Do You Write a Compliance Report?

Before we discuss the steps to write a compliance report, you should know what information to include. While the exact information will differ from one regulation to another, it’s a good idea to have the following components:

• Scope

  Provide the scope of your compliance report so readers can understand the report’s boundaries. Mention whether a compliance officer reviewed your report. It can also include things the officer didn’t review or things the officer may have missed in the initial review.

• Compliance with laws

  If your organization must comply with many provisions of a single law, create a separate section for each provision. Then explain how your organization complies with each of these provisions.

• Processes

  Add a section discussing the processes involved to ensure compliance. For example, explain the steps you took to store data securely to avoid data breaches. Try to include concise details to make it easier to identify any gaps during internal audits.

• Outcome summary

  The outcome summary should recap your organization’s current compliance status. Understanding this position will help you to create future measures that improve compliance effectiveness.

The above elements aren’t mandatory, but including them in your reports will provide more clarity to the readers. It will also help you identify gaps and add meaning to your organization’s compliance reporting process.

Next, let’s discuss how to write a compliance report.

How to Create a Compliance Report

Know your audience

Who is your target audience? Your answer to this question will determine the right tone and language for your compliance report.

For example, if you’re preparing a report for a compliance auditor, you can include technical jargon. If you’re presenting to the general public, make the report simple to read and understand.

Define team roles and responsibilities

Regardless of whether you have a dedicated compliance management team or a temporary team of employees from different operational areas, be sure to assign specific responsibilities and performance indicators. This will create accountability so you achieve better results.

Determine report frequency

How often do you have to prepare compliance reports? Depending on the regulations and laws, you may need to prepare a report monthly, quarterly, or annually. Therefore, it’s wise to note the report frequency so you can plan ahead to make sure resources are available when necessary.

Determine report content

The content of your compliance report should match the standards or regulatory requirements. For example, for an internal report, you can provide as much content as needed to achieve its purpose.

Note that most compliance reports require extensive data. To avoid issues in the future, be sure to have a robust data gathering and analysis process in place.

Compliance Reporting Made Easy With ROAR

The RiskOptics ROAR Platform is a risk and compliance management solution that puts you on the fast track to ensuring compliance.

ROAR reduces the time, effort, and uncertainty of setting up an effective compliance program. With a guided, content-rich approach, you can start your first audit in just 30 minutes. ROAR also provides crucial insights into your compliance program’s impact on your organization’s risk posture, helping you prioritize activities to strengthen compliance and reduce risk.

Schedule a demo to learn more about how ROAR helps eliminate compliance uncertainty.