Compliance Reporting: Types, Reporting Process and Examples

Payal Wadhwa

Payal Wadhwa

Apr 01, 2024

The magic potion for visibility over compliance health, progressive refinement, and strengthened market confidence is compliance reporting. A tailored compliance report with the right key performance indicators (KPIs) and key risk indicators (KRIs) effectively demonstrates compliance commitment.

Compliance reporting fosters a culture of transparency and responsible practices and contributes to an organization’s long-term success. Businesses embracing forward-thinking strategies recognize the importance of compliance reporting and so should you.

This blog goes all in on compliance reporting. Read on to understand the types, benefits, process, and reporting examples.

What is compliance reporting?

Compliance reporting is the process of producing a documented summary of an organization’s compliance status aligned with industry standards, relevant laws, corporate policies and regulatory requirements.

Compliance reports are submitted to the auditors with relevant evidence as a proof of compliance efforts initiated by the organization.

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Types of compliance reports

The main types of compliance reports include regulatory, financial, IT and operational. Each of these provide evidence of compliance for specific functions. However, the purpose of each of these reports and the recipients may differ.

Here’s more on types of compliance reports:

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Regulatory

Regulatory compliance reports demonstrate an organization’s adherence to regulatory requirements. These are for external compliance reporting and are reviewed by regulatory bodies for determining compliance status. These can vary as per industries, applicable regulations and geographical locations.

Financial 

Financial compliance reports indicate an organization’s adherence to laws enforced by financial and capital markets as well as accounting standards. Financial statements like balance sheet, cash flow statement, income statement, etc. are reviewed reports to get assurance about the organization’s financial health and internal controls effectiveness.

IT 

IT compliance reports focus on adherence to information security and data privacy regulations and commitment to effective IT governance. These reports cover areas like data protection, data privacy, access controls, encryption, backups etc.

Operational 

Operational compliance reports document an organization’s commitment to maintaining operational standards and adherence to internal policies and industry regulations. These are mostly for internal compliance reporting and focus on processes, quality management systems, safety, supply chains etc.

Types of organizations that require compliance reporting

Compliance reporting is required for improved risk management, better market perception, regulatory mandates and ongoing improvement. It must be baked in as a part of compliance culture for every organization. However, industries like finance, healthcare, data handling, education etc, necessarily require compliance reporting.

Take a look at the industries and types of organizations needing compliance reporting:

IndustryTypes of organizationsCompliance reports that may apply
FinanceBanks, credit card unions, payment processorsAML (Anti-money laundering) reports, PCI DSS compliance reports etc.
HealthcareHospital, clinics, healthcare organizationsHIPAA
Data-handlingTechnology and software, online services, e-commerce platforms, telecommunicationsGDPR reports, IT security compliance reports
Communication technology and CybersecurityIT security consultancy, managed security service providers etcISO compliance reports, NIST reports, SOC 2 reports
Publicly traded companiesCompanies listed on US stock exchangesSOX compliance reports
Educational institutionSchools, colleges etc.FERPA compliance reports in the US.

What is the process of compliance reporting?

The process of compliance reporting involves gaining a comprehensive understanding of the requirements, collecting supporting data and deriving insights for compiling the final report.

The key steps involved are:

Understand the reporting requirements

To comprehend the reporting requirements, it is essential to understand the objectives of the report and the key components that must be incorporated.

The objectives of compliance reporting include demonstrating proof of compliance, identifying exposed areas, assessing control effectiveness and driving ongoing improvements.

Next, for providing context to the auditor, there must be a statement on the regulatory framework against which the controls have been evaluated. The following key components must then be included:

1. Scope

The scope outlines the systems, processes and people that have been reviewed against the regulatory requirement for compliance reporting.

2. Review of the compliance process

The review of the compliance process highlights details on how risk assessments were conducted, the protocols that were outlined, the controls that were implemented, training programs that were developed, and surveillance mechanisms adopted.

3. Summary of key findings

The summary of key findings provides details on how controls stood against vulnerabilities and the critical areas that need attention. The insights must be data-driven to give a practical and holistic picture of the compliance status of the organization.

4. Actionable recommendations for improvement

Specific recommendations and next steps that the organization plans to initiate for addressing the gaps must be laid down. These can include additional training, incorporating better incident management systems etc.

Collate the necessary data and documents

Any kind of data and evidence that supports the above-mentioned requirements must be collated for scrutiny. This can include policy documents, penetration testing results, risk severity scores, data on effective risk mitigation, etc. Also employ checks for validating data integrity to ensure accuracy and reliability of report.

Derive insights from data

Next step is analysis and interpretation. Based on the predefined benchmarks, evaluate data for understanding if there are any patterns of non-compliance in vulnerable areas. The analysis also helps in understanding the direct and indirect implications of non-compliance and guides the way forward.

Compile the final report

The final report should then be compiled with a collaborative effort of legal, compliance, IT, management and other departments. It should be well-structured from scope to findings and support the claims with necessary evidence like log data, vulnerability scan reports, incident management reports etc.

Continuously track and revise

Owing to continuously evolving industry standards and progressive regulatory requirements, compliance reports should be regularly updated. It is also important to reflect on the impact of incorporating previous recommendations to remain aligned with the maturing compliance landscape.

You can also switch to an automation software like Sprinto for workflow automation, data collection, centralized risk management and for continously monitoring compliance efforts for flawless compliance reporting.

What are some compliance reporting examples?

Compliance reporting can be used to demonstrate compliance with financial regulations, data protection laws, IT security standards and several other areas.

Following are some examples of compliance reporting:

GDPR compliance reports include an overview of data privacy measures undertaken for protection of personal data of EU citizens. The legal basis for processing data, individual rights, secure data transfers, breach management and other aspects in alignment with GDPR requirements are examined.

PCI compliance reports specify how well the organization has been handling payment card information against the standards set by PCI council. Controls incorporated for cardholder data protection like firewalls, network security systems, access controls etc. are included in the report scope.

HIPAA compliance reports focus on administrative, technical and physical safeguards effectiveness for protecting patient health information (PHI). The abidance of HIPAA rules related to privacy, security, breach notifications etc is reviewed along with policies, procedures and controls.

ISO compliance reports document the adherence of ISO standards by an organization. It includes details in the risk assessment process and results, remediation measures, training programs, documentation and other compliance efforts.

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Benefits of compliance reporting

From weaving a culture of good governance and avoiding non-compliance ramifications to unlocking client trust and investor confidence, compliance reporting brings impactful benefits.

The key advantages include:

Tangible proof of compliance

Compliance reporting exhibits a deep sense of responsibility for ensuring compliance. The documented evidence that outlines details about the compliance efforts demonstrate alignment with regulatory laws.

Supports decision-making process

It is important to have holistic insights about the risk profile of the organization for critical and strategic decisions. Compliance reporting highlights potential risks and areas that need optimization thereby enabling businesses to make better choices.

Fosters better market relations

Compliance reporting brings a sense of transparency in organization’s operations and makes it easier to establish market credibility. Existing customers feel secure and new prospects are easy to win. Investors find it easy to evaluate the long-term sustainability of the business and make better-informed investments.

Facilitates Risk management efforts

Compliance reporting is an ongoing process and keeps the organization updated on new and potential risks that can emerge. The data also reflects the impact of previously initiated risk mitigation measures and guides the risk management process.

Promotes ongoing improvement

In an attempt to stand true to the industry and regulatory best practices and address compliance issues, the organization champions ongoing optimization. There are process adjustments, security strength enhancement and new training efforts that embeds a culture of continuous improvement.

Automate Compliance Reporting with Sprinto

Compliance reporting is essential for moving up the business ladder and winning big as it instills compliance confidence, improves public perception, ensures effective risk management and enables operational efficiency.

However the reporting requirements can be diverse and demanding. There are technical and operation challenges, interpretation ambiguity and employees clobbered with tasks. It makes perfect sense to leverage automation for your compliance reporting requirements.

Sprinto effortlessly becomes your compliance reporting hub by providing centralized risk visibility, initiating tiered remediation, ensuring ongoing compliance monitoring and collecting evidence automatically. It helps you measure the depth of compliance and spotting areas that need security tightening.

Sprinto runs on Sprinto for its own compliance management and reporting. So you can count on us for your compliance needs. Get in touch with an expert for a personalised demo.

FAQs

Who are the recipients of compliance reports?

The recipients of compliance reports include auditors, regulatory bodies, stakeholders, board of directors, investors, customers and anybody depending on the specific requirements.

Can automated software help with compliance reporting?

Automated software can help support compliance reporting with risk assessment, alerting and remediation, data analytics, evidence collection and meeting compliance obligations.

What are some challenges in compliance reporting?

Some key challenges in compliance reporting include understanding the requirements, keeping up with regulatory changes, leveraging the right technology, and training the personnel for the right reporting methods.

Payal Wadhwa

Payal Wadhwa

Payal is your friendly neighborhood compliance whiz! She turns perplexing compliance lingo into actionable advice about keeping your digital business safe and savvy. When she isn’t saving virtual worlds, she’s penning down poetic musings or lighting up local open mics. Cyber savvy by day, poet by night!

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