Internal audit vs Compliance, what's the difference?

[TerryPower]

I try to Google but the English too chim for me

 

[Demon_Hunter]

To be honest, there isnt much of a difference.

Internal Audit is checking if the transactions or process flows adhere to current tules and practices.

Compliance is more checking if current workflow matches to MAS or whatever rules prescribed by government.

 

[BEAN30]

Only difference is Compliance must check whether comply with company's SOPs, laws and regulations. Internal Audit can check on the financial aspects as well plus those mentioned and also make recommendations on how company can improve processes and workflows to achieve the same internal control objectives. Compliance is just compliance. You don't follow you kena warning! Can be good or bad. Internal Audit covers a wide scope and sometimes may not detect non-compliance of certain subject matters. Compliance is forever checking the same thing and any anomaly will be detected faster!

 

[Demon_Hunter]

Only difference is Compliance must check whether comply with company's SOPs, laws and regulations. Internal Audit can check on the financial aspects as well plus those mentioned and also make recommendations on how company can improve processes and workflows to achieve the same internal control objectives. Compliance is just compliance. You don't follow you kena warning! Can be good or bad. Internal Audit covers a wide scope and sometimes may not detect non-compliance of certain subject matters. Compliance is forever checking the same thing and any anomaly will be detected faster!

In my experience as internal auditor, we check historical transactions.
Anyone in compliance wants to comment?

 

[MizunoVolley]

Internal audit is check against internal rules.

Compliance is check against external rules

 

[Nicholas92]

Same same but different lo

Compliance tends to be more for banks, financial institutions which needs to follow certain laws and specific regulatory requirement:

Internal audit can cover the above, but also internal policies and rules.

You fail internal audit maybe chop bonus chop promotion. You fail compliance can say bye bye to your job.

 

[Tedicious]

In my experience as internal auditor, we check historical transactions.
Anyone in compliance wants to comment?

Compliance practitioner here since 2015 in the FI space.

Audit I believe is to c if you practice what you preach
Compliance is more of set polices, control and procedure for the firm based on the regulation that the firm is in (for eg: banks will be the banking act and MAS 626, payment firm will be the payment services act etc)

In layman term, both audit and compliance are the 'policeman' of the firm

 

[Demon_Hunter]

Nobody likes policeman. Speaking as an ex internal auditor

 

[dambio]

Audit is check got hanky panky or not.

Compliance is check whether got comply with regulators rules n regulations

 

[ninjaghost]

internal audit ish ownself check ownself, still got chance to fix internally.

compliance ish a set of regulation/policy that set by industry standard or authority for others to comply, without doing so might face the consequences..

 

[neanea]

Do you find auditor is a tiring job?

 

[williewombat615]

Writing from non-FI perspective…

Moi employer categorise compliance in relation to code of conduct and ethics. So any breach of the code would be investigated by compliance which is the responsibility of legal department.

Moi is in internal audit and may sometimes be asked to participate in investigation if Legal needs help with digging through transactions in ERP system.

Ultimately Legal calls the shot on what to do during investigations, next steps, conclusion, etc.

 

[Orphan]

Compliance's role is to ensure that the company's daily operations do not run afoul of the rules and regulations the company is subjected to.

Things like checking whether customer was onboarded properly, know-your-customer processes are adhered to, whether the company's new customer is on any sanctions list, whether the company might run afoul of any local regulations, whether employees' details are protected as per local data privacy laws etc.

Primarily, they act as a "prevention" role. Eg, "can we sell uranium to Kim Jun Un?" "No cannot!"




Audit (whether internal or external), checks through documentation like the balance sheets, transactions, processes to ensure everything is as reported. They can and will also check documentation from the Compliance dept. Rather than prevention like Compliance, they are doing detective work to check if crimes were commited or if there are any weakness/discrepancies. They do this by checking audit trails and at the end, generate a report to identify any areas of suspicion or areas that needs to be addressed/mproved upon. They might even check things like whether the company has sufficient and accessible fire extinguishers.

Eg Compliance say they flagged and stopped the company from selling uranium to Kim Jung Un. So audit will ask Compliance for proof that they did send out a warning and told the business they cannot do this trade. Audit will also check with the warehouse to confirm whether the company's store of uranium is not reduced. "Your record says the company called off the sale of 0.01 kg of uranium to Kim Jung Un, but your inventory shows you have 0.01 kg missing and unaccounted for. Please explain and dun tell me it was lost to half-life radiation, because I checked that only 0.001 kg should have been lost that way, plus also, you did not document these type of radiation loss anywhere."

 

[Courage]

1 is 2nd line of defense for compliance/regulatory matters and 1 is 3rd line for the entire organization. World of difference

 

[ballastic90]

Gotch difference meh ?

 

[mgx-alander]

internal audit means find the problem, no need to solve just say X X X need to fix and suggest solution

compliance means enforce the policy after audit finding the problem... say u dun do, chiu will kena from moi

so easy u oso dunose

 

[alph4tang0]

Audit is a check process (internal by own company folks, external from outside company)

Compliance is a policy.

Audit a department whether they work in compliant with company’s directives.

 

[nasilemak100]

both are internal enemies lor

 

[TheITGuy]

Audit is to ensure you are complied to compliance.

 

[One Piece]

I try to Google but the English too chim for me

Copilot response:

Internal Audit and Compliance are two different functions within an organization, each with distinct responsibilities1.

Compliance is a management function2. It’s often involved in strategic discussions about where the business is going and what it needs to achieve its objectives in a compliant way3. Compliance teams perform informal audits on current processes to find out whether people are following compliance requirements or if there is a problem with a particular process4. They are typically part of the second line in the 3 Lines Model from the Institute of Internal Audit (IIA), providing expertise, support, and oversight to the first line1.

On the other hand, Internal Audit is independent of management functions and oversees management activities2. The internal audit team is responsible for independent testing to determine if the controls and processes are working as intended1. They objectively examine the effectiveness or veracity of a process, report, or other metrics4. Auditors can attest to their findings and the best ones are Certified Internal Auditors (CIA) that have proven their competency and professionalism4.

In summary, while Compliance is focused on ensuring that the organization is following all relevant laws, regulations, and policies, Internal Audit provides an independent assessment of whether these controls and processes are working effectively14.