Compliance: Meaning and Importance
What is the Meaning of Compliance?
Compliance definition specifies it as the condition of conforming with the specified guidelines and conditions. A statutory or organizational authority can specify these standards, goods or processes and they may be updated periodically if required. An organization's concerned departments can formulate a compliance program to avoid any conflict of interest. To define compliance standards better, they can be further categorized into internal and external standards to assist with planning a course of action for fulfilling the requirements that will ensure compliance. Lack of compliance with external standards can lead to adverse outcomes in the form of fines, penalties, or legal action. At the same time, the absence of compliance with internal standards can result in disciplinary action against concerned employees.
Contracts are an integral part of the supply chain and hence there are several processes and protocols drafted within organisations to ensure adherence with the terms and conditions of the contract. Termed as contract compliance, it also facililtates timely review and audit of existing contracts.
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