What is the duality of compliance, and how does it relate to risk?

What is the duality of compliance, and how does it relate to risk?
A . The duality of compliance refers to the distinction between domestic and international regulations that an organization must follow.
B . The duality of compliance refers to the trade-off between investing in compliance measures and allocating resources to other business areas.
C . The duality of compliance involves addressing both compliance with obligations and compliance-related risks. Compliance involves meeting mandatory and voluntary obligations, while compliance-related risks involve addressing the risk of negative outcomes associated with non-compliance.
D . The duality of compliance refers to the balance between financial gains and ethical considerations in business decisions.

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Answer: C

Explanation:

The duality of compliance recognizes two key aspects:

Compliance with Obligations:

Organizations must meet mandatory (legal/regulatory) and voluntary (standards/policies) obligations.

Examples: Adhering to GDPR, HIPAA, or ISO standards.

Compliance-Related Risks:

Risks include fines, reputational damage, or operational disruptions resulting from non-compliance.

Effective compliance programs proactively mitigate these risks.

Why Other Options Are Incorrect:

A: Compliance encompasses more than geographic distinctions in regulations.

B: Resource allocation is a management issue, not the essence of compliance duality.

D: Ethical considerations are part of broader governance, not specific to compliance duality.

Reference: ISO 37301 (Compliance Management Systems): Discusses compliance obligations and related risks.

COSO ERM Framework: Connects compliance activities to risk management.