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CS Professional · Compliance Management, Audit and Due Diligence · Compliance Framework

Mehta Textiles Ltd. has a policy manual, but its board has never checked whether departments actually follow the statutes, rules and internal policies that apply to the company. Which statement best captures corporate compliance as a concept?

Corporate compliance is conformity with applicable laws, regulations, standards and internal policies, supported by processes that monitor and ensure it. Merely having a policy manual or filing one annual return is not enough, because compliance must be actually practised and verified across the organisation.

  1. APreparing a policy manual, since written policies by themselves amount to compliance
  2. BConforming to applicable laws, regulations, standards and internal policies, with processes to monitor and ensure that conformityCorrect
  3. CFiling returns with the Registrar once a year, since filing is all that compliance requires
  4. DMaximising profit within the limits that auditors have approved

Explanation

Corporate compliance means conforming to the laws, rules, standards and internal policies that apply to the company, and it requires systems to ensure and monitor that conformity. A manual that is never followed does not amount to compliance. Annual filing is only one part of the obligation.

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