What is compliance, and how is it measured in an organization?

What is compliance, and how is it measured in an organization?
A . Compliance is a measure of the degree to which obligations are proven to be addressed, and it is
measured by assessing requirements, actions & controls to address requirements, and evidence of effectiveness.
B . Compliance is the ability to avoid legal disputes, and it is measured by the number of lawsuits and enforcement actions filed against the organization.
C . Compliance is the financial success of the organization, and it is measured by revenue and profit margins.
D . Compliance is the level of stakeholder satisfaction measured through stakeholder surveys and feedback.

View Answer

Answer: A

Explanation:

Compliance refers to the organization’s adherence to mandatory and voluntary obligations, measured by evaluating its ability to meet these requirements effectively.

Definition:

Compliance involves implementing and monitoring actions and controls to fulfill legal, regulatory, and ethical obligations.

Measurement:

Requirements: Assessing the obligations the organization must meet.

Actions and Controls: Evaluating the mechanisms in place to achieve compliance.

Effectiveness: Verifying outcomes through audits, reviews, and monitoring.

Why Other Options Are Incorrect:

B: Avoiding disputes is a byproduct, not the definition of compliance.

C: Financial success is unrelated to compliance as a specific discipline.

D: Stakeholder satisfaction is broader than compliance metrics.

Reference: ISO 37301 (Compliance Management Systems): Explains how to implement, measure, and monitor compliance.

COSO ERM Framework: Discusses compliance as part of risk and governance activities.