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Compliance 101

Workflow Automation for Compliance Programs
Mar 16, 2021
4
Minutes

In a world where efficiency is king, it comes as no surprise that the practice of workflow automation is as popular as it is. Every process has some form of workflow to go through, and these often include several manual tasks, which increase risk exposure due to their inherently error-prone nature. Workflow automation addresses this lack, working on a company-wide scale. For instance, as per data published by the Annuitas Group, marketing and process automation drew in a 417 % increase in revenue. 

 

Considering the burdensome nature of the compliance process, it is clear that operating without automation is a risk, to begin with. But does automation scale as effectively when optimizing the compliance workflow? As a matter of fact, it does, and very elegantly too. Workflow automation for compliance works primary because it streamlines the flow of crucial information and key compliance responsibilities. With traditional compliance workflows, there is a lot of manual effort and input required from the compliance officer. Compliance oversight and coordination can also be challenging in such a system, but such complexities can be reduced with automation.

 

Another good example is the ability to adapt to new compliance norms. In a fast-paced, ever-changing market space, regulatory reforms can be an administrative nightmare for compliance officers. However, with the right tools, adapting to these new rules doesn't require a complete and expensive controls' overhaul. This is just one among the many benefits, and for more insight on this subject, read on.  

 

Compliance problem areas solved by workflow automation 

Compliance officers have their work cut out for them no matter the industry the organization operates within. This is especially true for companies without any form of automation in place as this means that workflow processes are still reliant on manual input. Human error is among the primary risk factors to account for when dealing with any form of manual work. 

 

This exposure only widens with complexity as employees start to seek workarounds and shortcuts in an attempt to provide quick solutions. As a result, this exposes the organization to some form of a regulatory violation. Workflow automation helps mitigate this risk as employees can only operate within set parameters, and these are designed to comply with internal policies. However, complex manual processes are just one among the many compliance breakpoints. Here are other common compliance problems areas that workflow automation can help optimize against. 

 Entrust Responsibilities

Even though employees understand the importance of compliance responsibilities, they can forget or lose track of when and what needs to be done. So, it important that responsibilities need to entrusted to various stakeholders and provide a due date for completion. For example, an IT manager needs to submit a cybersecurity report. Compliance workflow automation makes creating, assigning, and monitoring compliance responsibilities easier. An automated tool can send reminders to stakeholders who are supposed to complete a responsibility. Automation can drastically improve compliance oversight, coordination, and collaboration.

Entrust responsibilities to employess

Insecure document distribution

 A systemic problem plaguing many organizations is that information, often vital, is transmitted through less than secure channels such as email. Companies could face severe consequences if a document is seen by people who aren't authorized to view it. An efficient way to minimize exposure to this vulnerability would be to take control of document distribution with the help of automation. The company creates workflows with customized roles and employs automated document routing for maximum safety. Another solution is to have a workflow form that requests sensitive data and once uploaded, this data is automatically transferred to a unified document management program, such as SharePoint, and grants access only to those authorized. 

 

Unique industry-specific regulatory norms

Compliance norms vary based on the industry and there may be some especially strict rules to follow. This is a problem because not all tools are equipped for these unique requirements. Some software may not support necessary compliance frameworks, which can spell trouble since it might manual controls. Automation helps this by enabling the design of flexible workflows to ensure that any complex processes required by regulation aren't sidelined. 

Inadequate tracking of documents and data transfers

 Businesses have to manage and transmit large volumes of data via documents on a daily basis. Generally, organizations use some form of database or a cloud service to store and interact with this data. Unfortunately, this can cause inconvenience as many such technologies don't allow you to track these documents' movement. 

 

Another issue is tracking down the data shared within these systems for the purposes of removal. This is a near impossible task as information is shared across various platforms. A solution helps automate the otherwise tedious process of creating the audit log or trail. 

Approval hunting

 In any company, there is always some form of the hierarchy followed regarding how information flows. For instance, employees may be required to get certification or approval from specific executive staff and chasing these approvals can be quite tedious. This is especially relevant to larger organizations where a request may get lost in the email inbox or may get delayed for some other reason. 

 

In such cases, it is quite common for employees to either skip this crucial step of approval or for administrators to issue quick approvals just to maintain pace. Any such occurrences are major compliance vulnerabilities that shouldn't exist and workflow automation can safeguard against them. These tools can be designed to ensure that information gets automatically routed to the designated recipient and follow-up alerts get issued in a timely manner. 

  

Ways to leverage automation to drive compliance

Considering the consequences that come with being noncompliant, there are several reliable and ingenious ways to leverage workflow automation for compliance. Take a look at the options that all companies have at their disposal. 

A robust compliance management or a GRC management tool can help companies automate compliance processes' overall management. Since no two companies are the same, internal policies and controls will vary and these tools can be used to design the automated workflows as needed. Some of the best ways to use this tool are to: 

  • Assign clear compliance responsibilities to employees based on the department they operate within.
  • Delegate tasks to responsible team members and use a workflow automation tool to monitor progress. 
  • Store documents and ensure that document retention stays flawless for when auditors come knocking. Workflow automation minimizes the chances of human error and can also help simplify search during audits. 

 

Succeeding at workflow automation for compliance does rely on software being used. Not only should it have the certification, but it should also be equipped to operate within the applicable compliance framework. The VComply GRC software suite meets all these requirements and goes further to offer integrated risk assessment and management programs. Armed with this tool, you can empower your compliance teams to work optimally and prioritize compliance as they should. For more information, contact us online. 

VComply Editorial Team
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What are the Common Features of Internal Controls?
Mar 5, 2021
4
Minutes

We know that good governance is the culmination of robust internal controls. Risk management specialists and compliance officers always speak about implementing internal controls. What exactly is the definition of internal controls?

The federal security law, Section 13(b) of the Securities Exchange Act of 1934 provides a clear definition of internal controls interns of accounting and bookkeeping: 

The act states that: 

(1) All transactions should be conducted only in accordance with management's general or specific authorization 

(2) Transactions are recorded as necessary (I) for the preparation of financial statements in conformity with generally accepted accounting principles or any other criteria applicable to such statements (3) and for keeping the accountability of assets 

(3) Access to assets should be done only by management's authorization 

(4) Perform recorded accountability of assets with existing assets at reasonable intervals 

This definition provides only a partial view of the scope for internal controls, which is also only accounting and bookkeeping perspective. Actually, in business, the scope of the term internal control is much more wide. Any measure or process you adopt to achieve the organization's operational, financial, and compliance objectives can be referred as controls. These could include policies or procedures that are preventive, detective, corrective, directive, or corroborative in nature.  There would be no way to track the performance of compliance obligations or financial reporting in the absence of controls. It makes it difficult for the management to make fully informed financial decisions.  

An entire internal control system helps the organizations establish an environment that ensures that the company is doing its business according to the rules and regulations. Regular audits are conducted to calculate the risks arising out of lack of internal controls or to test the effectiveness of controls. 

Establish the internal controls by assigning responsibilities

 

The following are the basic features required for a robust internal control system: 

Leadership Integrity 

 Once the leaders encourage integrity through their actions, employees automatically follow them. It sets the overall value system of the organization. It can be continuously imbibed in the minds of the employee through written materials like handbooks and manuals. However, management should also follow the policies to ensure successful implementation of the policies and procedures. 

Competent Employees 

 An organization's ability to recruit and retain competent personnel indicates management's intent to properly record accounting transactions and compliance obligations. In addition, the retention of employees increases the comparability of financial records from year to year. Furthermore, an auditor's confidence in the underlying accounting records increases as he observes the reliability of the organization's personnel. This in turn reduces an auditor's assessment of the risk of a material misstatement in the entity's financial statements. 

Segregation of Responsibilities 

One can bifurcate a task into a series of small tasks by segregating it between various individuals. Segregation of responsibilities is intended to prevent unwarranted fraud and error. It is important to have an effective SOD policy to ensure the efficiency of the relevant internal control. This reduces the risk of errors, mistakes and misappropriations. It helps the company separate various related functions to ensure that a single individual is not in charge of an important task. 

Records Maintenance 

Documentation is an important component of any internal control. Maintaining appropriate records enables management of records like storing, safeguarding, and destroying tangible or electronic records.  Using a GRC solution that seamlessly integrate various applications like Google Drive with the platform helps maintaining and managing . A backup of all the data ensures there is no data loss in case of power failure or there are no employee creates fake transactions. It also acts a legal proof during litigation. 

Relevant Safeguards 

Many safeguards prevent unauthorized access of company assets. They can be physical e.g. locks or intangible e.g. – passwords and pins . Irrespective of the methods, they are an important feature of the company's internal control plan. Documents such as blank checks, company letterhead and signature stamps are items that require safeguarding. One may commonly overlook this. 

Thus, to ensure good governance and compliance, a company should have effective internal controls in place. VComply is a leading GRC platform that helps meet the demands of compliance professionals by helping them perform risk assessment and implement controls.  It comes with built-in compliance frameworks that helps you automate the implementation of compliance controls.

Devi Narayanan
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5 Pressing Compliance Challenges You Will Face in 2021
Feb 2, 2021
15
Minutes

The year 2021 ushers in a new decade of business change, especially considering the roller-coaster that 2020 was. As organizations move forward, there are various compliance challenges both new and old that compliance officers must come to terms with. Compliance refers to playing according to the rule book, so amid geo-political changes, data privacy concerns, questions on operational resilience, and cybercrime threats, there is new interest in policy and regulatory mandates.

To shed some light, here are 5 pressing compliance challenges businesses will face 2021.

The workplace after COVID-19

As workplace restrictions ease and eventually give way to business as normal, organizations will have to rethink their work models, ensure workplace safety, and assess their exposure to legal risk. With the onset of the new administration in the US, the Occupational Safety and Health Act (OSH Act) is expected to pursue COVID-related enforcements more aggressively.

OSHA had earlier issued guidance on preparing workplaces for COVID-19 and it expects employers to take steps such as:

●      Developing an infectious disease preparedness and response plan

●      Having policies and procedures for prompt identification of potentially infectious individuals

●      Issuing flexible leave policies, in line with public health guidance

If employers fail to comply with standards, for instance, by not adopting virtual meetings as a control when the situation calls for them, there could be hefty fines to be paid on lawsuits.

Apart from OSHA, employers would have to pay attention to the Americans with Disabilities Act(ADA) and the Family and Medical Leave Act (FMLA) too. As an employer, you may also want to institute a pandemic response team and undertake workplace risk assessment to know who may be at risk based upon their regular workday interactions.

Remote work as a permanent fixture

While opening the workplace in a safe manner, employers may find it difficult to dislodge work from home from its perch. Many find that it boosts productivity (while saving commute time and costs!) and, going forward, many companies may move to a partially-remote work model.

However, while work from home uncomplicated the path forward at the onset of the pandemic, it may have complicated compliance by a whole lot. For instance, how do you manage payrolls for employees who work out-of-state for half the month and in-state for the rest? Do your employees get stuck paying income tax in two states?

Alongside a web of complicated tax issues, you also have the world wide web and the issue of data privacy and security to heed to. With weaker Wi-Fi networks, more personal devices, and the absence of company IT security systems, the prospects of cyber risk increases. A single data breach can cripple your business and cause financial, legal, and reputational loss. Some other elements that employers will have to consider are:

●      Work from home infrastructure

●      Occupational safety and health

●      Disability accommodation

●      Insurance coverage in a WFH setting

Brexit and subsequent EU-UK deals

Brexit has a direct impact on businesses in the UK and a direct impact on the US. Major finance companies in the US route their EU operations through London, and hence the implications of the Brexit deal are important. Banking services, for instance, no longer enjoy automatic right of access to markets in the EU. Likewise, professional qualifications won’t be recognized automatically. In essence, you would have to comply with different sets of regulations, for the UK and EU, wherever applicable, moving forward.

Freedom of movement between the UK and EU is also something that Brexit severed. New immigration rules have entered into force, but several visa restrictions have been removed. Importantly, data transfers from EU to UK and UK to EU will be treated differently. The UK does not yet enjoy an ‘adequate’ status when it comes to data protection, just like it does not enjoy ‘equivalent’  status for financial services. Finally, for a multi-country data breach you could be dealing with both, the UK's Information Commissioner’s office and an EU regulator.

Big data and balancing rewards and risks

With business ecosystems going digital the potential for big data to revolutionize how a company provides its services is unprecedented. However, given the legal, financial, and reputational ramifications of mishandling personally identifiable information (PII), such as passwords, payment information and passport number, it is possible for data to pose serious compliance challenges. You must be prepared to account for the flow of data through your organization, through all points, be it collection, processing, or storage.

Here are 10 compliance hurdles linked with big data:

●      Inability to properly identify and classify data

●      Lack of mapping data with the regulations that apply to them

●      Lack of clarity on the ownership of the data

●      Possession of large volumes of data that could be subject to a major breach

●      Insufficient tools to manage and control the data through its lifecycle

●      Possession of vulnerable infrastructure that houses data

●      Inability to distinguish between public and private data

●      Lack of controls with respect to third party big data service providers

●      Insufficient knowledge of global regulations that apply to data being handled

●     Presence of unprotected data on the cloud

As technology continues to disrupt the way businesses operate, maintaining a compliant environment will be a challenge but will prove to be a necessary safety net.

Environmental protection as a priority

As consciousness of the fragility of the world we live in continues to grow, more attention will be given to the way businesses conduct their operations. What is the effect of non-compliance with environmental regulations? Penalties, fines, project delays, increased scrutiny, and above all, a tarnished public image are a few. Apart from these, there are physical risks such as floods and fires that can arise if environmental issues aren’t given due respect.

Depending on where you are located, you may have different levels of regulations to adhere to, for instance, county-level, state-level, and federal-level. Hence, it is good to do a full audit of your operations and note the regulations that apply to you. Some of them may pertain to hazardous waste, air permits, storm water, toxic substances, clean water, resource conservation, and so on. Being compliant is not a choice, really. But your organization can transcend the limits drawn by regulations and strive for what is socially desirable too.

Adopting low-carbon policies, using energy efficiently, saving resources through the supply chain, for instance, are approaches that build customer confidence and draw investor attention. The hard work put into maintaining legal compliance and setting green development targets can yield to economic advantages in the long-term.

One thing about these 5 compliance challenges is that juggling between multiple compliance regimes, such as PCI DSS and GDPR or HIPAA and CIJS, is hard. It becomes even more difficult if you do not have a way to oversee compliance on an organization-level. Poor communication, training, monitoring, and data management can hinder compliance. Being stuck in silos with spreadsheets and binders fails to provide the big picture and that is the gap VComply, an integrated GRC solution fills.

With it you can analyze your organization’s performance with graphs, delegate responsibilities to increase accountability, get real time alerts, obtain automated reports and much more. So, as you tackle the compliance challenges2021 has in store, commit to a smarter way of running your organization!

VComply Editorial Team
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Compliance Management Best Practices for Public Agencies
Nov 13, 2020
5
Minutes

Good governance is essential for every organization. And government agencies are no exception to this. Government, regulatory agencies, and public sector companies need to comply with a myriad of regulations. Regulatory compliance comprises the rules and regulations connected to business procedures. When regulatory compliance is disregarded, then it can lead to a lawful penalty and damage in reputation. Some rules and regulations that government agencies must comply with include the Dodd-Frank-Act, the Payment Card Industry Data Security Standard (PCI-DSS),Health Insurance Portability and Accountability Act (HIPAA), and Federal Information Security Management Act (FISMA). Frameworks such as COBIT and NIST, a compliance standard, inform government bodies how to keep pace with regulations.

 

Key Regulations Government Agencies Must Comply With

Let's take a look at some of the important regulations government agencies must comply with:

FISMA

The Federal Information Security Modernization act made it a requirement for federal agencies to develop, document, and implement an information security and protection program. The act mandates that these agencies provide information security for the data and systems they and their industry partners manage.

PCI-DSS:

Payment Card Industry Data Security Standard is a standard for companies that manage registered credit cards from large card schemes. The PCI Standard is commanded by the card brands, but it is supervised by the Payment Card Industry Security Standards Council.

 

This standard was built to develop security all around the cardholder data. Every company that acquires and progresses card payments should cooperate with the PCI-DSS. This includes all government agencies that take card payments for provisions.

NIST:

The National Institute of Standards and Technology is a non-regulatory government company that improves technology, metrics, and standards to encourage creativeness and business competition among U.S. - based companies.

 

NIST creates principles to support government agencies and help them reach the requirements of the Federal Information Security Management Act (FISMA). NIST also helps those agencies by safe guarding their data. It creates the Federal Information Processing Standards (FIPS) per FISMA. The Security Of Commerce accepts FIPS, with which the government agencies must cooperate.

Challenges of Compliance and Governance for Government Agencies

The main challenge for government agencies to follow compliance rules has been the inability to gather data and manage programs across the organization. The challenge is expanded because of mixed technologies used by various teams, and the inability to modify and scale according to administrative requirements.

 

To efficiently establish compliance, the involvement of all the stakeholders is necessary. The management needs to monitor and oversee the status of compliance across different systems, report any non-compliance, and implement measures to remediate issues.

The major governance challenges that a government agency faces are as follows:

 

1.   There is a lack of an organized approach to manage compliance.

 

2.   Compliance strategies are not followed through to the end to actually see benefits.

 

3.   Junior-level employees are assigned to project management positions with limited help to be efficient and effective.

 

4.   Agencies that work separately from each other keep introducing new rules and regulations, which further complicates governance.

 

The True Cost of Non-compliance

Here are some of the costs of non-compliance that government agencies must consider:

Personal liability

Compliance errors can be a monetary cost, not just to an agency but also to individuals. Personal liability is an issue for compliance officers responsible for compliance at their agency. Honesty, integrity, and morals are a huge part of compliance, and individuals are held accountable for ignoring the regulations for their business.

 

When an agency fails to comply with the business executive necessities, it leads to a $5000 fine or imprisonment for the concerned officers.

Inconsistencies across an organization

Most of the time, compliance is restricted to a small number of divisions or people, but obeying rules often demands information from more functions. Thus, it's important for everyone in a team to be informed about the meaning of compliance, how it can influence their part, and how it qualifies into the broad view.

 

Failure to follow compliance in an organization often points to deeper communication and collaboration issues across an organization.

Time consumption  

The lack of a well-defined system to handle compliance procedures can cost hundreds of wasted hours to an organization. Thus, it's important for organizations to employ a specialist to arrange the filings in the domestic dialect and file the proper forms at the domestic jurisdictions office.

Good Governance and Compliance Best Practices for Government Agencies  

The best and efficient way to manage good governance and appropriate culture within government agencies is to introduce an effective governance framework across the agency.  At its core, the best compliance management systems offer the following:

Sound Administrative Framework

Good governance relies on an administrative framework that helps the agency to attain its objectives. The agency should establish a sound governance framework that is embedded throughout the organization.

Transparent Processes

Establish processes and policies across the organization, implement controls, and create and conduct audits to test the effectiveness of controls.

Good Coordination

Ensure that there is visibility of governance framework and good coordination among inter-related agencies.

Practical Planning

Practical preparation helps to control and utilize resources efficiently, expand compliance capabilities, and develop a sense of responsibility across an organization.

Training

Train employees and executive management in compliance fundamentals and help them execute their compliance responsibilities.

How Software Helps Government Agencies Manage Compliance Easily

Here are a few ways in which compliance management software helps government agencies better manage their governance requirements:

Adherence to regulations

Timely adherence to social, legal, corporate, environmental, government, and financial compliance helps agencies avoid fines and penalties. Compliance management software helps automate these activities, so agencies never fall back on their responsibilities or miss important compliance deadlines.

Effective Procedures and Management

Compliance management software makes sure there is an appropriate record of inspections, assessments, and developments. It also helps agencies develop reliable processes and procedures to ensure everyone in an organization knows its compliance duties and responsibilities.

Effective Collaboration

Compliance management software helps government agencies collaborate more effectively and save time on compliance activities. You can then allocate these resources to other areas where they need them.

Wrapping up

While government agencies work to implement programs to better their citizens, they must also adhere to rules and regulations that help them meet these goals. To efficiently manage compliance and governance needs, agencies must employ GRC software tools such as VComply and establish a compliance strategy that helps them stay ahead of the curve. The VComply platform provides a suite of products that offer effective risk management frameworks and controls while revolutionizing regulatory compliance management. This tool enables seamless digital collaboration and gives you real-time risk management solutions.

Devi Narayanan
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