How do compliance programs help SME India grow?


Every business in India has policies, procedures and processes that need to be maintained in order to prevent and detect violations of laws and regulations.

And to make sure your company and your employees follow the laws established, a compliance process has been brought into being.

By adopting business compliance practices, your business will improve its process efficiencies by:

  • Identifying high-risk processes and adopting a risk-based approach to rationalise controls
  • Ensuring the control design sufficiently improves risk coverage of all locations
  • Ensuring better documentation of controls, deficiencies and related processes through automation and standardisation
  • Adopting a more concentrated approach to manage SOX processes, risks and controls
  • Real-time tracking of internal controls
  • Reducing overall auditing costs by relying more greatly on internal controls team through an enhanced focus on evidence and documentation
  • Increased focus on segregation of duties analysis for systems

Having understood the importance of a compliance program, we must also study the shift in the internal audit process. When it comes to ensuring effective compliance, managing risks and improving business performance, Internal Auditors have an important role to play.

The need of the hour is to solidify the role of Internal Auditors and turn them into strategic partners who can take care of the following:

Business model changes

A business model is always dynamic. Internal auditors need to strategically meet emerging business opportunities by taking charge of the following:

  • Mergers and acquisitions
  • Changing regulatory requirements
  • New product lines
  • Delivery methods
  • Partnerships
  • Reviewing changes
  • Transition plans
  • Validity and scope of current control design
  • Assisting in identification
  • Documentation of key risks and controls to new models
  • Checking impact of regulatory compliance and reporting requirements

Expansion of international operations

Once a business start expanding abroad, it becomes even more important for internal auditors to ensure that there are no compliance violations impacting the parent organization. Auditors need to relook at the following to meet this requirement:

  • Effectiveness control design in business practices
  • Ensuring compliance with corporate policies and regulations
  • Ensuring compliance with export laws and regulations
  • Tracking international business and employees by developing and enforcing relevant controls, policies, communication aspects and compliance assessments.

Vendor management practices and associated risks

Every business grows with the assistance of its ever-increasing vendor network. It thus becomes very important for internal auditors to get better visibility of vendor ecosystems and ensure that risks are identified and mitigated early on. This is done by:

  • Using initial screening, data collection and documentation reviews to assess the effectiveness of third-party relationship management
  • Ensuring appropriate controls are in place
  • Evaluating the level of risk management integration into the supply chain management

Increased focus on cyber security issues and IT controls

Internal auditors need to be vigilant of increasing data security breaches. This can be done by:

  • Assessing internal processes
  • Adoption of industry standards or framework
  • Implementation of revised security models
  • Looking at system controls and general IT controls
  • Providing timely assurance on the adequacy of cyber security efforts

Studies have proven that SME India derives significant benefits when auditors take active part in the SOX program. This is because the partnership between internal auditors and SOX compliance groups will help in:

  • Gap analyses and rationalising controls
  • Identification of inefficiencies and redundancies
  • Correctly assessing the effectiveness of the governance process of SME India
  • Ensuring that management can review the effectiveness of controls and take real-time remedial measures if the need arises
  • Assistance in identifying internal control design, documentation, and testing expectations

Besides operational benefits, organizations are seeing the benefits of compliance programs from an overall cost perspective too.


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