Compliance risk
Compliance risk , also known as integrity risk , refers to the potential for an organization to face legal penalties , financial losses , reputational damage , or operational disruptions due to failure to comply with applicable laws , regulations , industry standards , or internal policies . Definition Compliance risk , also known as integrity risk , arises when an organization fails to adhere to the legal, regulatory, and ethical standards relevant to its operations. This type of risk can impact an organisation’s earnings, capital, and reputation, potentially leading to fines , lawsuits , business disruptions , loss of licenses , or government sanctions . Key Elements Legal and Regulatory Requirements : Compliance risk includes failure to adhere to local, national, or international laws and regulations, such as those related to financial reporting , data p...