BSBCOM603: Compliance Management System Report and Recommendations

This report provides a comprehensive analysis of compliance management systems, addressing various aspects such as internal and external compliance requirements. It explores the effects of compliance, including potential risks and penalties associated with non-compliance, and proposes strategies for risk minimization. The report examines different compliance systems, comparing them in terms of cost, effectiveness, efficiency, feasibility, and alignment with organizational culture. Based on this comparison, it recommends specific systems and components for effective compliance management. The study emphasizes the significance of a well-structured compliance management system in safeguarding organizations from legal issues and protecting stakeholders.

Running head: COMPLIANCE MANAGEMENT SYSTEM
COMPLIANCE MANAGEMENT SYSTEM
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Table of Contents
Introduction......................................................................................................................................2
Compliance requirement..................................................................................................................2
Internal compliance requirement.....................................................................................................2
External compliance requirement....................................................................................................2
Industry compliance requirement....................................................................................................3
Compliance effects..........................................................................................................................3
Areas affected..................................................................................................................................3
Risks................................................................................................................................................3
Penalties...........................................................................................................................................3
Risk minimisation............................................................................................................................3
Compliance system..........................................................................................................................3
Available systems and standards for each option............................................................................3
Comparison of system in terms of cost, effectiveness, efficiency, feasibility and matching the
organizational culture......................................................................................................................4
Recommendation of systems or components..................................................................................4
Conclusion.......................................................................................................................................4

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Introduction
Compliance management system refers to an integrated system that includes various
documents, processes, functions and others and can help an organization in complying with all
the rules and regulations and to save the consumers of any harm due to violation of all those
rules and regulations. The main aim of the study is to carry out analysis of the compliance
system of the company under study. The paper will discuss about the various compliance
requirements, compliance systems and the compliance effects.
Compliance requirement
Internal compliance requirement
Internal compliance requirements include all those practices of the organizations and the
processes used by the organization in order to meet all the compliance requirements internally
such that risk can be mitigated or to look after the quality standards. The company in the scenario
makes use of an external consultant who can help the organization in seeing that its internal
compliance requirements are being met through proper booking keeping and other records. The
organization makes use of certain procedures in order to have proper guidance for all the
managerial information and records. Various minutes are prepared for this purpose, Information
is kept on all important issues and it is made accessible to all the employees in the organization,
Integrity of information is maintained.
External compliance requirement
External compliance refers to all the legal requirements that the organization is required
to comply with.

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Industry compliance requirement
An organization needs to comply with the requirements of both the government and the
federal agencies.
Compliance effects
Areas affected
Areas that can be affected if a proper compliance system is not in place is finance
function, human resource function and various others.
Risks
The risks associated with non-compliance is that external audits can be conducted by the
government, business can be dissolved and others. The lives of associated people can be
affected.
Penalties
The penalty will be imposed based on the negligence level and can range from a simple
monetary charge to even criminal charges.
Risk minimisation
Strict policies and procedures can be there for minimization of risks.
Compliance system
Available systems and standards for each option
Risk management systems include- risk identification, quantitative analysis and
qualitative analysis, response and monitoring. In order to ensure the organizational compliance

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internally and externally, there are various options. For instance, the organization under study
can make use of internal auditors, policies and procedures to ensure that all rules and regulations
are being complied with. In order to ensure the compliance requirements externally, external
auditors can be appointed by the company and the company can also establish a separate
Liaisoning department in order to ensure that better relationships with the government are
maintained by complying with the regulations.
Comparison of system in terms of cost, effectiveness, efficiency, feasibility and
matching the organizational culture
For ensuring the internal compliance requirements is that there can be internal auditors,
policies and procedures. Internal auditors can help in meeting the compliance requirement and
the cost of appointing them is also less as compared to external auditors. They can also help in
improving efficiency of operations. In order to ensure external compliance the liasioning
department can be established and external auditors can be appointed. However, the company
can establish a liasoning department as that will not only help in compliance but will also help to
improve the image of the company.
Recommendation of systems or components
The system that is preferred for ensuring compliance management in the organization is
that of- internal auditors and policies for ensuring internal compliance requirement and for
external compliance requirements a liason department can be established since it will help the
company to save the cost of appointing external auditors and the risks of information sharing can
also be avoided.

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Conclusion
From the above discussion, it can be concluded that it is very important for all the
organization s to have an effective compliance management system to comply with all the legal
requirements and thereby save the customers from any harm due to non-compliance.