Business Compliance Audits-Are They Necessary? 
by Craig Nelson

Why should a business, be it for-profit or non-profit, regularly conduct a legal compliance audit? The reason is quite similar to the reason why everyone is advised to have regular physical exams by their family physician.

Our society and system of governance at all levels-federal, state, and local-has become so complex and top heavy with a myriad of laws, regulations, and rules that it has become far too easy for a business to find itself unintentionally in violation of one or more of them. Unfortunately, along with all of those new laws, rules, and regulations have also come what can be significant penalties for being found to be in violation of them, and it is usually too late to identify such violations when an examiner for such governmental agencies as the Maine Employment Security Commission, Maine Revenue Services, Maine Department of Labor, Maine Human Rights Commission, or the Internal Revenue Service arrives at your door to perform an unannounced audit examination or investigation. It has, therefore, become a cost-effective necessity that all types of businesses periodically engage in some type of legal compliance audit or checkup.

There are two levels of compliance that such an audit seeks to identify. The first of these is of a more general nature, which applies to all types of businesses - whether they are for-profit or non-profit - and which includes such general legal/regulatory compliance issues as worker's compensation, employment security, sexual harassment and a myriad of employment tax and labor law issues and the like. The second level of compliance is more specific to the type of business being audited and focuses on the laws, regulations, and rules which govern that particular type of business, such as an auto dealership, a restaurant, a retail store, or a home health care, nursing home, behavioral health, or similar social service agency.

Based upon my experience over the years in conducting many such legal compliance audits for my business clients, I have always found that having such an audit conducted by a professional who is knowledgeable with respect to all of the applicable laws, regulations, and rules has been both worthwhile and cost-effective for them and their business.

 Craig H. Nelson