MANAGEMENT

Detailed explanation-1: -Compliance risk is an organization’s potential exposure to legal penalties, financial forfeiture and material loss, resulting from its failure to act in accordance with industry laws and regulations, internal policies or prescribed best practices. Compliance risk is also known as integrity risk.

Detailed explanation-2: -Compliance risk is an organization’s legal, financial and criminal exposure if it does not follow industry laws and regulations. Regulations are official rules for how things should be done. The goal of many regulations is to protect people and sensitive data.

Detailed explanation-3: -While regulatory risk relates to a potential change in laws and regulations, compliance risk relates to the potential of your business to violate existing laws or regulations. Often, compliance risk results from: insufficient control systems. lack of training. lack of due diligence.

Detailed explanation-4: -Legal Risk vs Compliance risk Legal risk indicates potential legal actions against a company. In contrast, compliance risk results in material loss and financial forfeiture. A lawsuit is an example of a legal risk. Whereas failing to deliver or comply with government regulations is a compliance risk.

Detailed explanation-5: -The Environmental Protection Agency, the federal office that oversees the host of legal rules and regulations relating to your organization’s environmental impact, categorizes these types of risks into two key focuses: human health and ecological impact.