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One of the types of compliance audits is Sarbanes-Oxley. It applies to public firms that conduct initial public offerings (IPO) and are required to obtain compliance audits of laws about finance and IT.

The objective of compliance auditing, therefore, is to enable assessment of whether the activities of auditable entities are in ance with the authorities governing those entities in order to express a conclusion designed to enhance the degree of confidence of the intended users.

What is a Compliance Audit? A compliance audit is a formal review of an organization's procedures and operations mainly focusing on whether an entity is complying with internal rules, regulations, policies, decisions, and procedures.

An example of a compliance audit is an audit of a national bank. The bank would be audited for compliance with industry standards of privacy, financial transactions, and more, per governmental regulations.

An external third party conducts a compliance audit, whereas an organization's employee conducts an internal audit. Compliance audits ensure organizations follow government regulations, whereas internal audits ensure an organization's employees follow company policies.

An example of a compliance audit is an audit of a national bank. The bank would be audited for compliance with industry standards of privacy, financial transactions, and more, per governmental regulations. This audit helps to ensure that the bank is functioning legally and ethically.

A good example of a compliance review would be reviewing a fixed number of account opening documents to make sure the branch staff collected the correct information to meet BSA/AML/OFAC requirements.

A compliance audit is an independent evaluation to ensure that an organization is following external laws, rules, and regulations or internal guidelines, such as corporate bylaws, controls, and policies and procedures.