As global regulations proliferate and stakeholder expectations increase, organizations are exposed to a greater degree of compliance risk than ever before. Specifically, compliance risk is the threat posed to a company’s financial, organizational, or reputational standing resulting from violations of laws, regulations, codes of conduct, or organizational standards of practice.
To understand their risk exposure, many organizations may need to improve their risk assessment process to fully incorporate compliance risk exposure. The case for conducting robust compliance risk assessments can be made given today’s business complexity, but it is also deeply rooted in the U.S. Federal Sentencing
Guidelines for Organizations, which establish the potential for credit or reduced fines and penalties should an organization be found guilty of a compliance failure. Nevertheless, according to a survey conducted jointly by Deloitte & Touche LLP and Compliance Week, 40% of companies do not perform an annual compliance risk assessment.¹
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