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How long is compliance underperforming tolerated?

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Question added by Salman Iqbal , ISP-FTTX Migration Engineer , Kuwait Network Electronics & Technology CO
Date Posted: 2013/09/14
Ali Rehman
by Ali Rehman , Internal Audit Director , University of Central Asia

This question is of very broad nature. There are certain standards for which there is no tolerance for non-compliance or under compliance. These standards are and not limited to: IFRS, Companies Ordinance, Tax Regulations, etc.....

 

After the mandatory compliances then comes the Organizations' policies which are helping Organizations in achieving its goals. Deviations, non or under compliances means you are getting away further from achieving your Organizations' goals.

 

As per standards and best practices, there should be no limit all. All the policies should be complied with at all times. However it depends from Organization structure itself.

 

If the company is privately owned, then the non-compliance level can be tolerated by10% of transactions keeping in view that all the exceptions should be authorized by the Company owners or shareholders. There are several arguments that came across such as, this policy cannot be complied with, this is against standards or practices etc.. In these cases the policy requires amendments and the non-compliances should again be minimized to10% only.

For public limited companies, again there should be no level at all and all the non/ under compliances should be highlighted and reported to board for their further actions

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