When you are managing a company, one of the things that you would need to be always aware of is making sure your company is ready for an audit anytime. In fact, it will be beneficial to have unscheduled internal audits several times a year to make sure that you are ready for the real thing.
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What are the consequences of failing a compliance audit? Here are some of them.
Loss of Trust or Credibility
Your primary concern when you fail an audit is loss of trust and credibility in your company. This loss of trust can be from your customers, your shareholders and your employees. Once there is an indication that you are able to lead your team well, it can be very hard to redeem yourself or gain their trust again.
Fines and Penalties
Failing an audit may mean fines and penalties for your company. In most cases, the penalties can be severe. Often times, the fines will keep coming until you are able to fully comply with the rules and regulations.
Loss of Time, Money and Resources
In order to make corrections or procedures, you will need to assign someone, usually another manager, to oversee the process. That is a big loss in resources to have a high-ranking member of your organization oversee such a project, which will not generate income for the company and will even loss the company time and money.
All these consequences can be prevented. You just need to be conscientious of making sure that you are compliant in all your processes.