Compliance Risk Assessment
What is a Compliance Risk Assessment?
A Compliance Risk Assessment (CRA) is the identification of the risks that a business can face in relation to its legal compliance, internal policies and procedures and other compliance related matters.
Why Businesses need Compliance Regulatory Risk Assessment?
Businesses must conduct CRAs to spot the entity’s risks and assess their importance. Based on the assessment, the entity will spot any inefficiencies in the system and enhance the efforts for compliance to improve the “problematic” sector. Companies conduct many types of assessments, but the compliance risk is a specific one focusing on the compliance of the business with applicable laws.The constantly evolving regulatory environment has made compliance risks a serious threat for businesses due to the challenge to keep up to date with all the amendments and the practical implications that they represent. CRAs, together with a proper regulatory watch system can protect a business from reputational damage and fines.
Understanding Inherent and Residual Risk Management (CRA)
Inherent Risk
“Inherent risk” is the level of risk an institution would face if there weren’t controls to mitigate it. In simple words, it is the risk before the controls. A complete assessment will help a business to understand its inherent risk and organise its strategy in advance before the risk occurs.Residual Risk
When the business examines its risks considering the existing applicable controls, we are faced with a “residual risk”. By considering these two calculated levels of risk, a business can assess its current controls and evaluate if they are efficient or not.
In conclusion, as compliance standards for businesses are given more importance, CRAs seem necessary to eliminate failure for compliance.
How can Pideeco help you with Compliance Risk Assessment?
Our decade-long experience in compliance has helped us gain thorough knowledge of the creation and execution of Compliance Risk Assessments. We can help your business:- Set-up and execute an effective and comprehensive Compliance Risk Assessment tailored to your business, products, and services.
- Assess and include any regulatory changes and/or obligations that are relevant for your business in your CRA.
- Liaise with the different departments of your company to gather the information needed for the assessment.
- List and report any inherent risks that your company is facing, the so called cartography.
- List and report any residual risks that your company may be facing post-assessment.
- Set-up a mitigation plan for the residual risks and help you solve your companys compliance issues.
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