Description: Compliance is monitored by the bodies that enact different compliance standards and laws.
Understanding the Idea of Compliance
What is compliance?
Compliance means conforming to set standards, or rules and regulations or abiding by the laws of the land. While some compliance standards like the ISO focus on adhering to standard procedures, some others require adheringto quality or safety standards, and a host of others like HIPAA and banking standards may require all the above.
Compliance can be a ‘state of being’ or the ‘the process of’ adhering to compliance standards’.For example: A ‘Standards body’ like the Institute of Electrical and Electronics Engineers (IEEE) may specify software development standards, this is the ‘process’ of adhering to rules. Now, if the software is distributed in compliance with the vendors licensing agreement, this is ‘being’ in accordance with rules.
Need for compliance
Formulation of compliance standards is rooted in several factors and events in the past and has evolved over time. Some standards are set keeping future possibilities in view. The factors and purposes that have influenced the need for compliance standards are:
- Ethical, safety, accountability, transparency and traceability reasons
- To ensure quality of products and services
- For documentation and review purposes
- To prevent possible legal hassles
- For performance analysis or other statistical analysis
- To incorporate Best Practices and for the common good
Types of compliance
There are several types of compliance standards for specific fields like corporate, healthcare, banking, patient, clinical, Human Resources, food safety, trade and logistics, regulatory and quality compliance and more.
Compliance is monitored by the bodies that enact different compliance standards and laws. While some are government bodies like the HIPAA regulatory body and FDA for drug administration and compliance, there are several independent bodies that monitor other compliance standards, such as the ISO, IEEE and others.
Advantages of compliance
- Compliance standards help in inculcating ethical, fair and best practices
- By adhering to compliance standards in manufacturing and servicing, one can bring about consistency in products and performance
- Avoids redundancy, misunderstanding, misinterpretation and litigation
- Protects the rights of all stakeholders
- Checks wastage, misuse or misappropriation of funds or material or power
- Prevents scams, scandals, and data theft, and ensures safety, security and privacy of data and builds reputation
- Helps in easy supervision due to a standardized system being in place.
Non- compliance is failure or refusal to comply with the set standards. This may lead to
- Fines or penalties by the governing bodies
- Compliance certificate getting cancelled
- Litigation and bad reputation
- Financial loss or loss of business
- Inspections and checks from other governing bodies
- Getting Business license cancelled or privileges scrapped off