Definition:
Compliance audits are systematic evaluations of a company’s adherence to regulatory requirements and internal policies.

Contextual Explanation:
These audits help identify compliance gaps, ensure regulatory adherence, and improve risk management strategies.

Why It Matters:
Regular compliance audits help mitigate risks, prevent legal issues, and maintain operational integrity.

Example:
A financial regulator requires a payment provider to conduct a compliance audit every two years to ensure AML and KYC procedures are up to date.