Compliance testing
Compliance testing checks conduct or transactions against specified laws, regulations, policies or other requirements. The criteria, scope and responsible reviewer should be clear; results are meaningful only in relation to what was tested. In older financial-audit terminology, compliance tests often meant tests of controls, which ask whether a control operated effectively. The two meanings should be distinguished rather than treated as interchangeable in every context.
Worked example
A reviewer checks a sample of waste-disposal records against specified environmental requirements. This is regulatory compliance testing; it is not automatically a test of a financial-reporting control under the auditing standards.
Common mistake
Do not assume a passed test establishes compliance with every law or that all compliance work is performed by a regulator. Identify the actual criteria and scope.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | BT | Supporting | September 2026–June 2027 |
| FIA | FBT | Supporting | September 2026–June 2027 |