Understanding Different Types of Compliance Audits

Compliance audits help you prove that your controls, policies, processes, and evidence meet the requirements your business is accountable for. These requirements may come from regulations, industry standards, customer contracts, internal policies, or certification frameworks.

This guide breaks down the main types of compliance audits by who performs them and by what they test. It also explains how to prepare for an audit, collect the right evidence, reduce audit debt, and stay ready between audit cycles.

What is a compliance audit?

A compliance audit is a rigorous, systematic examination of your organization’s adherence to regulatory requirements, industry standards, internal or external policies. This process involves a thorough evaluation of your company’s practices, procedures, systems, and internal controls to ensure they are aligned to the specific compliance framework or regulations that are relevant to your operations. 

Passing a compliance audit serves as a critical tool for you to demonstrate your commitment to security, as well as, serves as proof that you are operating within legal and ethical boundaries.  These audits can be conducted by your internal auditor or an internal audit team or by independent, qualified professionals who bring an objective perspective to the assessment.

To give you an idea of the scope, here’s an example you can consider. A healthcare provider might undergo a HIPAA compliance audit focusing on patient data protection, while a publicly traded company might face a SOX audit that examines the financial reporting controls of the company. Regardless of the specific focus, compliance audits share common elements when it comes to approach and execution. 

It is important to understand that audits are not a one time event but a part of an ongoing process of evaluation and improvement. You are expected and encouraged to address any issues that are identified during the audit and implement corrective measures that have the potential to enhance your compliance posture. 

Compliance audit vs. compliance assessment

A compliance audit is a formal, evidence-driven review of your organization against defined audit criteria. These criteria may come from a law, standard, framework, internal policy, customer contract, or certification requirement. Audits are usually systematic and may be performed by an internal audit team, an external auditor, a regulator, a certification body, or a qualified assessor.

A compliance assessment is usually more flexible. It helps you understand your current maturity, identify gaps, and decide what needs to be improved before a formal audit.

Use an assessment when you want to understand where you stand. Use an audit when you need formal validation against defined requirements.

Why is a compliance audit important for your business? 

A compliance audit matters because it turns compliance claims into evidence-backed assurance. It helps customers, regulators, partners, auditors, and internal stakeholders verify that your organization is operating within the requirements it has committed to.

Compliance audits help you:

• Build trust with customers, partners, investors, and regulators
• Identify areas of non-compliance before they become bigger risks
• Improve internal controls, security processes, and operational discipline
• Reduce the likelihood of fines, penalties, or failed customer reviews
• Support better risk and governance decisions
• Stay prepared for changes in regulations, standards, and customer requirements

While some audits are mandatory, their value goes beyond passing a regulatory check. A well-run audit can reveal control gaps, process inefficiencies, unclear ownership, and evidence problems before they affect the business.

Types of compliance audits

Most compliance audits can be grouped in two ways: by who performs the audit and by what the audit tests.

The broadest split is between internal and external compliance audits.

Internal audits are run by an internal audit team or another independent function inside the company. They help you identify control gaps, policy violations, and process weaknesses before they show up during a customer review, certification audit, or regulatory examination.

External audits are performed by an independent third party, regulator, certification body, or qualified auditor. They validate whether your organization meets the requirements of a specific law, standard, or framework such as SOC 2, ISO 27001, HIPAA, PCI DSS, GDPR, or SOX.

Area	Internal compliance audit	External compliance audit
Who conducts it	Internal audit, compliance, security, risk, or another independent internal team	Independent auditors, regulators, certification bodies, or qualified third-party assessors
Main purpose	Find gaps early, improve controls, and prepare for external scrutiny	Provide independent assurance that the organization meets a specific standard, regulation, or contractual requirement
Scope	Defined by the company’s risk priorities, policies, systems, processes, and business needs	Defined by the relevant regulation, certification framework, customer contract, or audit engagement
Output	Internal report with findings, risks, owners, and remediation actions	Formal audit report, attestation, certification decision, regulatory finding, or customer assurance outcome
Best used for	Readiness checks, continuous compliance, control improvement, and risk management	Customer assurance, regulatory obligations, certification, and stakeholder confidence

An internal audit can prepare you for an external audit, but it does not replace one when a regulation, customer contract, or certification body requires independent validation.

Another useful way to classify audits is by whether they are first-party, second-party, or third-party audits.

Audit type	Who performs it	Common use case
First-party audit	Your own organization	Internal readiness checks, control testing, policy reviews, and internal governance
Second-party audit	A customer, partner, supplier, or another organization that depends on your controls	Vendor due diligence, enterprise sales, partner assurance, supplier reviews, and right-to-audit clauses
Third-party audit	An independent auditor, regulator, certification body, or qualified assessor	SOC 2 attestations, ISO 27001 certification, PCI DSS audits, regulatory reviews, and formal assurance reports

This distinction matters because each audit type creates a different workload. A first-party audit helps you find gaps early. A second-party audit helps customers, partners, or suppliers decide whether they can trust you. A third-party audit gives independent assurance that you meet a defined standard or regulation.

After deciding who will perform the audit, the next question is what the audit will test. The categories below group compliance audits by the risk area, regulation, framework, or industry they cover.

1. Industry-specific compliance audits

Industry-specific compliance audits assess whether your organization meets the requirements specific to your sector, business model, data type, customer base, or operating geography.

A SaaS company may be asked for SOC 2 or ISO 27001 to prove security controls. A healthcare organization may need HIPAA or CMS-related audits. A company that processes card payments will need PCI DSS. Public companies may face SOX audits, financial services companies may need FINRA-related reviews, and government contractors may need FISMA-related assessments.

Treat industry-specific audits as a scoping exercise first. Identify the data you handle, the customers you serve, the geographies you operate in, the systems that support regulated workflows, and the frameworks or contracts your business needs to satisfy. This helps you decide which audit matters now and which controls can be reused across future audits.

2. Information security and data protection 

Information security and data protection audits examine how your organization protects systems, customer data, personal information, and sensitive records. These audits are common among SaaS, cloud, and data-driven companies because customers and regulators often require evidence that security and privacy controls are effective.

a. IT compliance audits

An IT compliance audit checks whether your technology systems, security controls, access processes, change management practices, and incident response procedures meet the requirements that apply to your business.

These audits often overlap with frameworks such as SOC 2, ISO 27001, PCI DSS, HIPAA, and NIST CSF. The auditor may review evidence such as asset inventories, access logs, vulnerability scans, change tickets, security policies, employee training records, backup records, and incident response documentation.

IT compliance audits are especially important for cloud-first and SaaS companies because many compliance failures stem from weak access controls, missing evidence, untracked infrastructure changes, inconsistent monitoring, or unclear control ownership.

b. SOC 2 (Service Organization Control 2)

If your business offers cloud-based services or stores customer data, a SOC 2 audit is all about proving you’re handling that data properly. It focuses on five key areas called Trust Service Criteria (TSCs): Security, Availability, Processing Integrity, Confidentiality, and Privacy.

A SOC 2 audit digs into how well a company is doing in those five areas:

• Security: Are systems protected from unauthorized access?
• Availability: Are services up and running when customers need them?
• Processing Integrity: Is data processed correctly, completely, and accurately?
• Confidentiality: Is sensitive information like business secrets kept secure?
• Privacy: Is personal information handled with care?

c. ISO/IEC 27001 (International Organization for Standardization 27001)

If your company manages sensitive information—whether it’s customer data or internal records—ISO 27001 is the go-to certification for proving your commitment to security. An ISO 27001 audit checks how you manage risks to the information you handle, making sure you’re keeping everything secure.

ISO 27001 audit checks if you have:

• Strong security policies: Are there clear rules in place for protecting sensitive information?
• Good asset management: Is every bit of data and every system accounted for and protected?
• Access control: Are the right people able to access the right information, and is it restricted from those who shouldn’t have access?

Passing an ISO 27001 audit shows your customers and partners that they can trust you to keep their data safe.

Note on surveillance audits: For ISO 27001, the audit cycle does not end after the initial certification audit. Certification bodies usually conduct surveillance audits during the certification cycle to confirm that the information security management system continues to operate effectively and that previous findings have been addressed. This makes ISO 27001 different from a SOC 2 report, which covers a defined reporting period. If you are pursuing ISO 27001, plan for ongoing readiness rather than treating certification as a one-time project.

d. GDPR (General Data Protection Regulation)

The GDPR Compliance is one of the most well-known data privacy regulations globally. It affects any company that deals with the personal data of people in the European Union, no matter where the company is based. A GDPR audit looks at how well a company is respecting individual privacy rights and protecting personal information.

A GDPR audit looks at:

• Whether your data use is lawful, meaning you have a valid reason for collecting and processing personal data.
• Individual rights, like ensuring people can access, correct, or delete their data when they request it.
• How well you’re managing consent, making sure people are informed about how their data will be used and that they’ve agreed to it.
• Your breach response plan, which ensures you’re ready to notify individuals and regulators in case of a data breach.

e. CCPA (California Consumer Privacy Act)

The CCPA Compliance is California’s version of GDPR, focused on protecting the personal data of California residents. A CCPA audit checks if companies are following the law when it comes to collecting, using, and sharing personal information.

A CCPA audit typically checks:

• Transparency: Are you clear about what data you’re collecting and why?
• Consumer rights: Are you allowing Californians to access, delete, or opt out of the sale of their data?
• Data protection: Are you taking reasonable steps to prevent data breaches?
• Protection for kids: If you handle data for minors under 16, are you following stricter rules around consent?

Companies that handle a lot of data or rely on selling data as part of their business model need to pass CCPA audits to avoid fines and build trust with their customers.

3. Healthcare and Privacy

Healthcare and privacy audits focus on how organizations protect patient data, manage healthcare operations, and meet sector-specific privacy and security rules. These audits usually apply to healthcare providers, healthtech companies, insurers, vendors, and business associates that handle protected health information.

a. HIPAA (Health Insurance Portability and Accountability Act)

If your business is in healthcare or handles personal health information (PHI), including, third-party vendors like billing services or cloud storage providers—called “business associates” under HIPAA, HIPAA compliance is non-negotiable. 

The goal of HIPAA is to ensure that patients’ medical records, treatments, and even billing information are kept private and secure.

A HIPAA audit typically examines two main areas:

• Privacy rule: This sets standards for how healthcare providers and their associates use and disclose patient information. It ensures that PHI is only shared for legitimate medical purposes—like between doctors or with insurance companies—and that patients have control over who can access their information.
• Security rule: This focuses on the technical and physical safeguards that protect electronic PHI (ePHI). It covers things like encrypting data, limiting access to only those who need it, and securing physical locations where data might be stored.

HIPAA audits also review how you handle patient rights, such as their ability to access or correct their medical records.

b. CMS (Centers for Medicare and Medicaid Services)

If you work with Medicare or Medicaid, CMS guidelines ensure that you’re delivering high-quality care while managing the funds properly. CMS audits are critical for healthcare providers, clinics, and hospitals working with these programs.

A CMS audit looks at:

• Billing practices: Are healthcare providers accurately billing Medicare or Medicaid for the services they provide? Overbilling or improper claims can lead to serious penalties.
• Patient care: CMS also focuses on ensuring that healthcare providers meet certain quality standards. This means everything from how quickly patients are treated to the overall outcomes of their care.
• Data protection: Since medical records are part of the process, CMS audits also touch on how well institutions are securing patient information in line with HIPAA and other regulations.

4. Payment and card security

Payment and card security audits verify whether businesses that store, process, or transmit payment card data are properly protecting cardholder information. These audits are especially important for e-commerce companies, fintechs, SaaS platforms with payment workflows, and any business that accepts card payments.

a. PCI DSS (Payment Card Industry Data Security Standard)

If your business processes credit card payments, PCI DSS is the standard you need to follow to protect cardholder data and prevent fraud. This applies to businesses of all sizes that handle credit card information.

A PCI DSS audit checks:

• Data protection: Are credit card details being securely encrypted when stored or transmitted? This is essential for protecting against breaches.
• Access control: Who has access to payment data? PCI DSS requires that only authorized personnel can view or handle sensitive cardholder information.
• Monitoring and testing: Companies must regularly test their security systems to make sure they’re effective. If there’s a security gap during compliance testing, it’s critical to find and fix it quickly.

A breach of payment card data can be devastating for any business—leading to fines, loss of reputation, and a lack of trust from customers. That’s why PCI DSS compliance is so important for businesses of all sizes. It reassures customers that their payment information is being handled securely, whether they’re shopping online or in-store.

5. Governmental and federal regulations

Government and federal compliance audits test whether agencies, contractors, and service providers meet public-sector security, reporting, and operational requirements. These audits often involve stricter documentation, security control testing, and incident response expectations because the systems may support government data or critical services.

a. FISMA (Federal Information Security Modernization Act) 

If your business works with U.S. government agencies, FISMA is the law that ensures you’re protecting government data. FISMA applies to both federal agencies and contractors, ensuring they follow strict guidelines to secure information systems.

A FISMA audit typically examines:

• Risk management: Agencies and contractors must assess potential risks to their information systems and develop a plan to manage those risks. This includes regular security assessments and monitoring.
• Security controls: Are there proper safeguards in place to protect government data? This includes both physical controls (like secure buildings) and technical controls (like firewalls, encryption, and user authentication).
• Incident response: How prepared is the organization to handle a security breach? FISMA requires that agencies and contractors have a solid plan in place to detect, respond to, and recover from cyberattacks.

6. Financial and corporate governance

Financial and corporate governance audits assess whether organizations have reliable controls over financial reporting, investor protection, market integrity, and service commitments that affect clients’ financial statements. These audits are common for public companies, financial services firms, and service providers that support finance-related processes.

a. SOX (Sarbanes-Oxley Act)

If your company is publicly traded in the U.S., SOX compliance is non-negotiable. This law was put in place to make sure financial reporting is transparent and accurate, especially after high-profile scandals like Enron. SOX audits help ensure that your financial controls are up to scratch and that your company is operating with integrity.

A SOX audit covers two main areas:

• Section 302: This part is all about the accuracy of your financial statements. It requires your CEO and CFO to personally sign off on the financials, making sure everything is accurate.
• Section 404: Here, the focus is on your internal controls over financial reporting (ICFR). The audit digs into your systems and processes to confirm they’re designed to catch any errors or irregularities in your financial data.

SOX audits also look at how well your management is reviewing and acting on any issues that pop up. This audit gives investors peace of mind that your company is playing by the rules.

b. FINRA (Financial Industry Regulatory Authority) 

If you’re in the securities industry—whether you’re a broker-dealer or part of an investment firm—you’ll need to comply with FINRA. FINRA is the watchdog for the securities industry, making sure everything is running fairly and by the book.

A FINRA audit typically looks at:

• Compliance with FINRA rules, which checks whether you’re following operational practices like trade reporting and supervising customer accounts.
• Financial condition reviews, which ensure you’re maintaining the required capital, using accurate accounting practices, and submitting financial reports properly.
• AML compliance, where your anti-money laundering policies are reviewed to ensure you’re detecting and reporting any suspicious activities.

Staying compliant with FINRA helps build trust with investors and keeps the financial markets running smoothly.

c. SOC 1 (Service Organization Controls)

If your business handles key processes that impact your clients’ financial reporting, a SOC 1 audit is essential. This applies to services like payroll processing, data hosting, or anything else that might directly affect a client’s financial statements.

SOC 1 audits are divided into two types:

• Type I: Assesses the design of the controls at a specific point in time. This audit is generally performed to verify that the necessary controls are in place and have been properly designed to meet the organization’s goals.
• Type II: Examines the operating effectiveness of these controls over a set period (typically six months to a year). This is a deeper audit that tests whether the controls not only exist but also work as intended over time.

A successful SOC 1 audit shows your clients that they can rely on you to handle their financial data securely and without errors.

What is audit debt?

Audit debt is the backlog of small compliance gaps, scattered evidence, unclear owners, stale documentation, and manual work that builds up between audits.

It usually starts quietly. A policy is updated but not mapped to the right control. Evidence sits across tools, folders, emails, tickets, or chat threads. A control owner changes teams. A screenshot gets reused even though it is no longer current. By the time the next audit starts, the team has to reconstruct months of control activity under pressure.

Common signs of audit debt include:

• Evidence is scattered across systems, folders, emails, and chat threads
• Only one or two people know where audit evidence lives
• Teams collect the same evidence repeatedly for SOC 2, ISO 27001, PCI DSS, HIPAA, or GDPR
• Control owners are unclear
• Internal audits happen only right before the external audit
• Findings are tracked, but remediation ownership is weak
• The team relies on stale screenshots instead of current evidence
• Audit preparation depends on memory instead of a repeatable workflow

Audit debt slows down audit cycles, increases preparation costs, and creates risk during renewals, customer reviews, and certification audits. The best way to reduce it is to treat audit readiness as an ongoing process: define control owners, collect evidence continuously, reuse evidence across overlapping frameworks, and track findings until they are remediated.

How to perform a compliance audit

A compliance audit should begin before an auditor requests evidence. The goal is to define the audit scope, understand the applicable requirements, collect proof, test controls, remediate gaps, and communicate findings clearly.

At a high level, the process follows five steps:

1. Define the scope, purpose, criteria, and owners
2. Collect documentation and evidence
3. Conduct a risk assessment
4. Review controls, processes, and policies
5. Communicate findings and remediation actions

The depth of each step depends on whether you are preparing for an internal review, a customer audit, an external certification audit, or a regulatory audit.

1. Define the scope, purpose, criteria, and owners

Start by defining what the audit will cover and what it will test. Without a clear scope, teams either over-collect evidence or miss systems, processes, and controls that should have been included.

Before you begin, answer four questions:
1. Scope: Which business units, products, systems, locations, people, processes, and technologies are included?
2. Purpose: Is this a readiness check, customer requirement, certification audit, regulatory audit, renewal audit, or internal governance review?
3. Criteria: Which standard, regulation, policy, contract, or framework will the auditor test against?
4. Ownership: Who owns each control, who will provide evidence, and who will approve remediation if gaps are found?

For example, a SOC 2 audit may focus on systems that support your customer-facing service, while an internal risk review may also include HR, finance, or back-office systems that are not part of the SOC 2 scope. Defining this upfront helps reduce audit delays and prevents unnecessary evidence requests.

Also document what is out of scope and why. This helps auditors, internal teams, and leadership understand the boundaries of the audit and reduces confusion during fieldwork.

2. Collecting necessary documentation and evidence

You need tangible proof of your compliance efforts and all the other documentation, related to compliance and controls, especially for an external audit, as the external auditor is going to need it. 

You need to start by collecting all the relevant documentation, including policies, procedures, manuals, and internal controls. You need to gather previous audit reports too, as they will help you understand your gaps, if the measures implemented have worked, and the path you took remediate these vulnerabilities. 

Document your compliance measures, including training records and incident reports. Compile evidence of internal controls, operational records, and financial documents that pertain to compliance efforts.

Based on the type and kind of audit you are conducting, here are some examples of evidence and documentation you might need:

1. For a data privacy audit:

a. Inventory and flow diagrams
b. Privacy policies 
c. Incident response plans
d. Disaster recovery plans
e. Data subject access logs
f. Data breach notification procedure
g. Records of data being processed, stored, and transmitted, safely

2. For a healthcare compliance audit:

a. Patient health information access logs
b. Privacy and security policies
c. Employee training records
d. Conducted risk assessments
e. Encryption and user access control documentation

3. For an information security audit:

a. Information security policies and procedures
b. Asset inventory
c. Risk assessment reports
d. Incident management logs
e. System configuration standards
f. Penetration testing results
g. Access control lists and user provisioning procedures

4. For internal audits:

a. SOPs
b. Control performance monitoring 
c. Risk Assessments
d. Workplace procedures – onboarding, offboarding
e. IT security policies
f. Software licensing records
g. Backup and recovery procedures
h. Code of conduct
i. Whistleblower policies
j. Business continuity plans

Manually collecting and gathering documentation can sometimes be a long-drawn process, and it ends up taking up valuable man hours that are better spent otherwise. Not to mention, manual evidence collection is prone to human errors. 

Documenting and evidence collection become more accurate and efficient using Sprinto. It works with your current tech stack to automatically generate an inventory of your resources, including code, personnel, cloud resources, infrastructure, and a comprehensive overview of all relevant controls, gathering evidence automatically to build a clear audit trail.  

Sprinto employs rule-based, least privilege automation to gather accurate and time stamped evidence. It can also cross-map different frameworks, enabling you to gather proof just once to meet the needs of various compliance standards, such as ISO 27001 and SOC 2. 

And for non-automated controls, the platform offers rule-based workflows that can be assigned to specific team members.

Where possible, collect evidence by control rather than by framework. Many controls overlap across SOC 2, ISO 27001, PCI DSS, HIPAA, GDPR, and other standards. Security training records, access reviews, vulnerability scans, incident response logs, vendor reviews, policy approvals, and change tickets may satisfy multiple requirements when mapped correctly.

Before the audit window opens, also confirm what evidence format your auditor will accept. Some controls can be supported with system-generated reports, logs, tickets, or continuous monitoring data. Others may still require screenshots, samples, or manual explanations. Aligning on the evidence format early prevents rework during the audit.

3. Conduct a thorough risk assessment 

This step involves a systematic review of your organization’s potential threats and vulnerabilities that could have an impact on its ability to function. To truly assess your organization’s threat landscape, follow these steps:

1. Identify potential risks and vulnerabilities, across all business functions, considering internal and external factors that could impact your compliance position. 
2. Next, assess the likelihood of each risk and gauge their impact on your business.  Use a standardized method to maintain consistency. 
Risk = Likelihood x Impact
3. Prioritize your mitigation efforts based on risk score.
4. Examine the controls in place for each risk and note any weaknesses in your present approach to risk management. 
5. Provide targeted risk mitigation plans for high-priority threats. 
6. These can involve adding new controls, improving current processes, or giving employees more training.
7. Document the entire process as it serves as a solid foundation for any and all upcoming audits and assessment.   

4. Review your controls, processes, and policies 

Thoroughly review your existing controls, processes, and procedures, to implement corrective actions to remedy any gaps identified. Here’s how you can go about it:

a. Examine each control in place and map them to the right framework. Assess their design and measure their operational effectiveness. 
b. Review your business processes and ensure that they align with your compliance regulations. 
c. Evaluate your documented procedures and look for any improvements that need to be made, in order to stay on top of the changing compliance regulations. 
d. Compare your controls against the regulatory requirements and best practices of the industry. 
e. Evaluate your incident response plans and involve the management team if they need to be updated.

5. Communicate your findings

The last step of this process is communicating the findings with key stakeholders. Your independent auditor or the internal auditor should give you an audit report that contains the following:

a. Executive summary of the report.
b. objectives and scope of the audit.
c. Methodology used to conduct the audit
d. Detailed findings of any gaps, threats, or vulnerabilities in the system.
e. Corrective actions recommended to remedy the identified gaps.
f. A compliance checklist to be followed.

How can Sprinto help with Compliance audits

Sprinto helps teams prepare for internal and external audits by bringing controls, evidence, owners, and auditor collaboration into one place.

The platform automatically collects time-stamped evidence from connected systems, organizes it against relevant controls, and helps teams maintain a clear audit trail. For controls that cannot be automated, Sprinto lets you assign workflows to specific owners so manual tasks do not get lost before the audit.

Sprinto also helps reduce duplicate evidence work by mapping controls across multiple frameworks. This means the same evidence can be reused across overlapping requirements for standards such as SOC 2, ISO 27001, PCI DSS, HIPAA, and GDPR.

For external audits, Sprinto gives auditors a dedicated workspace to review evidence, ask questions, and track progress. For internal teams, continuous monitoring helps identify control gaps before they turn into audit findings, making it easier to stay audit-ready between formal audits.

Frequently asked questions