Compliance Audit in Germany

An audit is a type of investigative procedure. The intent of this process is to identify and minimize potential risks in specific jurisdictions. This increases the probability of effectively preventing compliance violations and helps initiate preventive measures at an early stage.

During a compliance audit, companies or public institutions are subjected to a review designed to show the extent to which the respective organization complies with its individual legal requirements. All processes, particularly those relating to risk management, are reviewed during the course of the compliance audit and the effectiveness of the security guidelines is logged.

Access controls, contingency plans and other security requirements, such as the proper implementation of data protection regulations as well as the associated backup and retention of data, are also reviewed in a compliance audit.

Companies in Germany should conduct a compliance audit regularly and, in the best case, before an organization-specific risk materializes. If compliance measures are not taken until after possible breaches of the law have been detected or security vulnerabilities have become known, massive reputational damage may already have occurred or fines may have been imposed.

In the worst case, the very existence of the organizations that have committed significant legal violations, such as participating in a cartel, may be at stake. Particularly at risk are companies with foreign subsidiaries or joint venture companies whose business understandings and actions often differ from German organizations. Precisely such corporate structures are thus particularly vulnerable with regard to compliance violations.