‍Compliance Reporting: Key To Security Controls Transparency

‍Is your team struggling to generate accurate and up-to-date compliance reports? Or perhaps you are unsure which compliance report is relevant to your organization. If you are facing such issues, it’s time to implement a well-structured compliance reporting process. What is compliance reporting? In this article, we’ll discuss it in detail.

Have you ever noticed that you need to present evidence to regulatory bodies to prove that your organization has followed specific rules and regulations? Have you ever asked why?

Well, this piece of evidence serves as the sole document that authentically demonstrates that you are genuinely following the regulations (without being engaged in any unethical means). So, in case any regulatory body inquires about how you got compliance certification, you only have this evidence to present—nothing else will suffice or be relevant.

Now, what is this piece of evidence? How to get it? The information is known as a compliance report, and you can generate it only by following a well-structured compliance reporting process. Let’s learn about it in detail.

What Is Compliance Reporting?

Compliance reporting is the formal procedure where organizations create and present tangible, concrete evidence—often in the form of compliance reports—to auditors, stakeholders, or investors. These reports serve as proof, demonstrating that organizations are meeting the mandatory requirements set forth by compliance regulations without fail.

But what exactly is included in these reports? Typically, compliance reports include —

• Which regulation(s) organization has covered
• What was reviewed (controls, access rights, or security system) during the compliance audit and what wasn’t
• What actions were taken to meet the regulatory requirements
• Summary of the entire compliance process

Furthermore, compliance reporting is divided into two categories—internal and external—each designed to address distinct use cases. To provide you with more clarity, here’s a quick comparison of internal vs external compliance reporting.

Internal Compliance Reporting vs External Compliance Reporting

Internal compliance reporting is focused more on the company's internal controls. In this process, the organization conducts a thorough review of operations. Besides, it generates reports to check whether all the processes/actions are aligned with the company's internal policies and standards. However, these reports are not shared with any external bodies or personnel; rather, they are exclusively for internal uses, like analyzing them to figure out what improvements can be made to their internal controls to streamline operations and maintain data security.

On the other hand, external compliance reporting emphasizes meeting rules set forth by external authorities. In this process, organizations review their controls and generate reports to determine whether all regulatory requirements are met. Furthermore, unlike internal compliance reporting, external compliance reports are shared with outside parties like investors, compliance auditors, and tax agencies.

Now that you are familiar with the compliance reporting process, let's explore the different types of compliance reporting, a few examples, and who needs those reports.

Types Of Compliance Reports

Type 1: Regulatory Compliance Reports

This type of report shows how well an organization adheres to the regulatory requirements set forth by regulatory bodies. Furthermore, compliance auditors review these reports to check whether the organization's practice complies with all legal requirements/obligations. If an organization successfully meets those mandatory requirements, the auditors will provide it with a compliance certificate (for whichever regulation it was reviewed for). This certification will prove that the organization has passed the audit and follows the required compliance regulations and guidelines.

Type 2: Operational Compliance Reports

This type of report depicts an organization's commitment to following its own internal policies, operational standards, and other industry regulations. It keeps records of key aspects like quality management, safety measures, supply chain practices, and more. However, these reports are solely meant for internal use, such as assessing the performance of internal controls and finding scope for improvement.

Type 3: Financial Compliance Reports

This type of report demonstrates how well an organization adheres to laws set forth by financial and capital markets (like accounting compliance standards). These reports are generally known as financial statements, which include valuable insights like balance sheets, income statements, cash flow statements, and more. Auditors review these reports to determine if the organization's financial health is stable and whether internal controls are performing effectively.

Type 4: IT Compliance Reports

These reports show an organization's commitment to meeting information security standards. Furthermore, these reports include details about – how data is kept safe, how data privacy is maintained, access control practices, encryption methods used, and which backup system is used to prevent data loss. With these reports' help, auditors can determine if the organization's security system is effective enough to prevent security breaches and whether they will be eligible to get compliance certification for data security regulations.

Type 5: Data Privacy Compliance Reports

These reports exhibit how committed an organization is to protecting its customers' sensitive data (like personal identifiable information). They are generally created to provide organizations with complete insights about who can access those sensitive data. Further, with the help of these insights, organizations can take precautionary actions to prevent data tampering, intentional misuse, and unauthorized access attempts. This way, they can seamlessly adhere to data privacy law.

Why Is Compliance Reporting Important?

Given below are two main reasons why it's important to generate a compliance report:

1: To Avoid Getting Penalized

You must be well aware that most regulatory bodies (governments) impose hefty penalties for compliance violations and non-compliance. So, if your organization fails to provide necessary evidence about adherence to compliance regulations, you will be liable to pay a significant fine. That's not all. At times, regulatory bodies even take more strict action, like revoking operating licenses, which can be devastating for both individuals and organizations.

Compliance reporting plays a crucial role in avoiding such situations. It involves generating a detailed compliance report that serves as proof that your organization has met all compliance obligations without fail. You can further present these reports to regulatory auditors and get compliance certification, which protects your organization from being penalized.

2: To Gain Investors And Other Stakeholders Trusts

Be it a large organization or a small startup, every business needs investors, business partners, and other stakeholders support to expand their business.

But how can this support be gained? You need to earn their trust to get their support; compliance reporting is the key to opening that door. Compliance reporting allows you to present reports to investors and stakeholders, demonstrating your commitment to adhering to regulations and safety standards. With these reports' help, you can exhibit that all the regulatory requirements are met and security practices are effectively performed to prevent potential security breaches.

This transparency reassures investors, gives them confidence in your business's stability, and ultimately helps them decide to invest in your business and offer the necessary support.

Also Read: Compliance Risk Management: An In-Depth Guide

However, you must ensure that your compliance reports are accurate, reliable, and up-to-date; otherwise, they won't be of any value. But how do you achieve that level of precision in compliance reports? We've outlined a few ways that will help generate precise and well-detailed compliance reports.

4 Effective Ways To Generate Accurate Compliance Report

Below, we have listed 4 unique methods to generate accurate, reliable, and up-to-date compliance reports:

1: Plan Your Compliance Reporting Process

You need to plan your compliance reporting process well ahead of time to avoid making major modifications to the reports later on (which can impact the accuracy of your reports). But how to plan? Here’s how you can do that:

• First, understand which compliance regulations and industry standards apply to your organization. This will help you include the necessary information/details when creating your compliance report.
• Then, assemble a skilled team to review your internal controls and other business operations and thoroughly oversee the compliance reporting process. However, assign each member a unique set of responsibilities so that no biases are involved in your compliance reports. For instance:

• You can assign a member role of task owner who will be responsible for collecting evidence and updating necessary documents.
• You can designate another member as a report recipient who will be responsible for verifying what needs to be included in the reports (only including valuable business insights that are actually needed for either internal or external use cases).

• Once everything is figured out, create a checklist of what needs to be done. This way, you will be able to keep track of the process without getting lost.

Overall, this method can generate accurate and up-to-date compliance reports that meet the needs of different audiences (auditors, investors, and external stakeholders).

2: Analyze Your Compliance Reports Prior Submission

After creating the compliance report, you next need to analyze it and compare the compliance requirements you’ve met with those outlined by the regulation. This assessment will help you understand whether you are fully compliant, partially compliant, or non-compliant.

If, after reviewing the reports, you find that you are fully compliant (which means all the mandatory requirements are met), you can provide these reports to the auditors.

If you discover that you are partially or non-compliant, review the reports, identify what you have missed, rework them, and generate another set of fresh reports. This will ensure that you maintain accurate reports that truly show a transparent view of compliance status.

3: Revise/Update Your Compliance Reports Whenever Any New Changes Are Made To Regulations

Generally, regulatory bodies don't frequently change compliance regulatory requirements, but if they do, revise or update your reports to reflect those changes accurately. This will make your compliance reports more relevant and viable, which ultimately helps your organization get compliance certification without any hassle.

However, if you fail to incorporate those changes in your reports, your reports will be considered irrelevant and compromise your certification eligibility. If you don't get compliance certified, you will lose your credibility and the trust of investors – which no organization would want.

4: Opt For An Automated Access Review Platform

So far, we have seen how crucial it is to include necessary details in compliance reports (without missing out on any) to ensure they remain relevant. However, this relevancy can be compromised if the compliance reporting process is done manually. Why? Manual methods like — shifting from one spreadsheet to another to gather data and entering details one by one in the reports can be extremely time-consuming. Not to mention, there is a high risk of omitting important details, which can further impact the accuracy and relevancy of the compliance reports. However, this risk can be entirely eliminated with the help of an automated access review solution like Zluri.

Zluri's access review automatically conducts a thorough review of user's access and generates accurate, detailed reports demonstrating organizations have implemented practices to ensure data safety – that too within minutes. It documents every necessary detail about users and their access and records every corrective action teams have taken to ensure only authorized users gain data access–making the compliance report more accurate, transparent, and reliable.

The best part is that it allows you to run multiple reviews and generate multiple reports at once, so you don't miss the opportunity to get compliance certification on time. It automatically sends the compliance reports to the assigned members, allowing them to take prompt actions without delay.

To help you understand more clearly how you can automate access review in Zluri, let's take Okta as an example and go through its access review tour.

Also Read: How To Automate Compliance Workflows?

Demonstrate Your Adherence To Regulations With Compliance Reporting

In conclusion, compliance reports are more than just documents; they are proof of evidence that shows an organization's commitment to adhering to regulatory requirements. Furthermore, with the help of these compliance reports, you can show your credibility and gain investors' trust. This way, you can open the door to new investment opportunities. Most importantly, compliance reports are the only documents that can save you from paying costly penalties for non-compliance - so take them seriously.

However, to make compliance reports reliable and relevant, you have to include what's necessary—nothing more, nothing less. Otherwise, they will end up being just another report with no value or relevance.

So, to ensure only accurate details are in your reports, you need to pay careful attention to details and implement practices like revising reports on a timely basis, assigning the right teams, analyzing them, and opting for tools like Zluri. This way, you will never fail to generate up-to-date, accurate, and reliable compliance reports that can be seamlessly used for different use cases (external or internal).

Overall, make sure to present 'what's true' in your compliance reporting because this is the only way to become more viable in this competitive market.

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