Company compliance performance audit

A company compliance performance audit reviews entity governance, state filings, tax and employment obligations, licenses/permits, recordkeeping, health & safety, and industry-specific regulations to identify gaps, quantify risk, and recommend remediation.

The core audit phases include Preparation (scope, team, document request, timeline), Performance (document review, testing, interviews, sampling), Reporting (findings, risk ratings, remediation plan and timeline), and Follow-up (verify remediation, continuous monitoring).Key items to audit include: Entity & Governance: articles/organizing documents, bylaws/operating agreements, ownership/stock ledgers/member lists, minutes of meetings, officer/director/member appointments, registered agent and registered office.

State-level: annual/biennial reports and fees; registered agent on file; foreign qualification where doing business outside formation state; franchise or privilege taxes; assumed name/DBA filings; state-specific licenses and permits; unclaimed property filings; securities (“blue sky”) filings where applicable.

Federal Employer & Regulatory: IRS filings, payroll tax deposits and returns (941/940/Forms W-2/1099), withholding and remittance schedules; DOL wage-and-hour compliance (minimum wage, overtime, recordkeeping); OSHA workplace safety obligations and recordkeeping; OFAC/anti-money-laundering screening where relevant.

BOI/Corporate Transparency Act (FinCEN): A major change occurred in 2025. FinCEN’s March 26, 2025 interim final rule removed BOI reporting requirements for entities formed in the U.S. (domestic entities), while foreign entities registered to do business in the U.S. remain within scope and have new deadlines.

Auditors should verify whether a company is exempt and document BOI filing status and change-reporting processes. Sales/Use Tax and Nexus: Post-Wayfair state economic nexus rules mean remote sales can create tax obligations.

States vary in thresholds (commonly $100k–$500k) and enforcement intensity varies by state—some states (CA, MA, WA, WI, IL, ME) are particularly active in sales-tax audits. An audit should include nexus analysis, marketplace facilitator registrations, proper taxability determinations, and exemption certificate management.

Employment-related State Variations: Workers’ compensation and state unemployment rules differ by state—verify coverage, policy classifications, state IDs, timely wage reporting, unemployment wage and tax filings, and any required state-specific payroll registrations.

Recordkeeping and Retention: Maintain statutory corporate books and financial/tax records, payroll records, employee files, OSHA logs, and license/permit files. Confirm retention periods per federal and state rules.Penalties and consequences for non-compliance can include late fees, loss of good standing, administrative dissolution or revocation, tax interest/penalties, payroll liabilities and trust-fund penalties, OSHA fines, and potential personal liability in veil-piercing scenarios.For remediation and best practices, immediate remediation timelines should be prioritized by legal/regulatory risk.

Businesses should establish a compliance calendar and owner responsibilities, adopt a risk-based frequency for audits (annual for entity-level filings; quarterly or semi-annual for payroll/tax reconciliations depending on complexity), use automation and dedicated compliance platforms, train responsible staff, and document remediation and verification steps.

Tools and vendors that can assist include registered-agent and multi-state compliance services (e.g., Harbor Compliance, CT Corporation), sales tax automation (e.g., Avalara, TaxJar, Numeral/TaxOps), compliance/audit workflow platforms (e.g., AuditBoard), HR/compliance training vendors (e.g., EasyLlama), and accounting/tax advisors.The recommended structure for the blog and newsletter content includes: An introduction defining what a company compliance performance audit is, who needs it, and top risks for US LLCs and small companies.

An audit roadmap covering preparation, performance, reporting, and follow-up, with sample timelines and required documents. A comprehensive checklist grouped by category: corporate governance & entity filings; federal tax & payroll; state tax & licensing; employment & benefits; workplace safety; data privacy & AML/OFAC; and industry-specific obligations.

State-specific guidance explaining variations and pointing to actionable resources (state SOS and Department of Revenue links, multi-state compliance services), with examples of typical state requirements (annual report timing, registered agent, franchise taxes) and highlighting sales tax nexus/high-audit states.

An update on BOI/CTA summarizing the FinCEN March 2025 change and what businesses should document and check. Information on penalties and remediation, including a sample remediation plan, timelines, and escalation.

Practical next steps and resources, such as compliance calendar templates, vendor recommendations, sample audit report structure, and a checklist download call-to-action.

A company compliance performance audit reviews entity governance, state filings, tax and employment obligations, licenses/permits, recordkeeping, health & safety, and industry-specific regulations to identify gaps, quantify risk, and recommend remediation.

The core audit phases include Preparation (scope, team, document request, timeline), Performance (document review, testing, interviews, sampling), Reporting (findings, risk ratings, remediation plan and timeline), and Follow-up (verify remediation, continuous monitoring).Key items to audit include: Entity & Governance: articles/organizing documents, bylaws/operating agreements, ownership/stock ledgers/member lists, minutes of meetings, officer/director/member appointments, registered agent and registered office.

State-level: annual/biennial reports and fees; registered agent on file; foreign qualification where doing business outside formation state; franchise or privilege taxes; assumed name/DBA filings; state-specific licenses and permits; unclaimed property filings; securities (“blue sky”) filings where applicable.

Federal Employer & Regulatory: IRS filings, payroll tax deposits and returns (941/940/Forms W-2/1099), withholding and remittance schedules; DOL wage-and-hour compliance (minimum wage, overtime, recordkeeping); OSHA workplace safety obligations and recordkeeping; OFAC/anti-money-laundering screening where relevant.

BOI/Corporate Transparency Act (FinCEN): A major change occurred in 2025. FinCEN’s March 26, 2025 interim final rule removed BOI reporting requirements for entities formed in the U.S. (domestic entities), while foreign entities registered to do business in the U.S. remain within scope and have new deadlines.

Auditors should verify whether a company is exempt and document BOI filing status and change-reporting processes. Sales/Use Tax and Nexus: Post-Wayfair state economic nexus rules mean remote sales can create tax obligations.

States vary in thresholds (commonly $100k–$500k) and enforcement intensity varies by state—some states (CA, MA, WA, WI, IL, ME) are particularly active in sales-tax audits. An audit should include nexus analysis, marketplace facilitator registrations, proper taxability determinations, and exemption certificate management.

Employment-related State Variations: Workers’ compensation and state unemployment rules differ by state—verify coverage, policy classifications, state IDs, timely wage reporting, unemployment wage and tax filings, and any required state-specific payroll registrations.

Recordkeeping and Retention: Maintain statutory corporate books and financial/tax records, payroll records, employee files, OSHA logs, and license/permit files. Confirm retention periods per federal and state rules.Penalties and consequences for non-compliance can include late fees, loss of good standing, administrative dissolution or revocation, tax interest/penalties, payroll liabilities and trust-fund penalties, OSHA fines, and potential personal liability in veil-piercing scenarios.For remediation and best practices, immediate remediation timelines should be prioritized by legal/regulatory risk.

Businesses should establish a compliance calendar and owner responsibilities, adopt a risk-based frequency for audits (annual for entity-level filings; quarterly or semi-annual for payroll/tax reconciliations depending on complexity), use automation and dedicated compliance platforms, train responsible staff, and document remediation and verification steps.

Tools and vendors that can assist include registered-agent and multi-state compliance services (e.g., Harbor Compliance, CT Corporation), sales tax automation (e.g., Avalara, TaxJar, Numeral/TaxOps), compliance/audit workflow platforms (e.g., AuditBoard), HR/compliance training vendors (e.g., EasyLlama), and accounting/tax advisors.The recommended structure for the blog and newsletter content includes: An introduction defining what a company compliance performance audit is, who needs it, and top risks for US LLCs and small companies.

An audit roadmap covering preparation, performance, reporting, and follow-up, with sample timelines and required documents. A comprehensive checklist grouped by category: corporate governance & entity filings; federal tax & payroll; state tax & licensing; employment & benefits; workplace safety; data privacy & AML/OFAC; and industry-specific obligations.

State-specific guidance explaining variations and pointing to actionable resources (state SOS and Department of Revenue links, multi-state compliance services), with examples of typical state requirements (annual report timing, registered agent, franchise taxes) and highlighting sales tax nexus/high-audit states.

An update on BOI/CTA summarizing the FinCEN March 2025 change and what businesses should document and check. Information on penalties and remediation, including a sample remediation plan, timelines, and escalation.

Practical next steps and resources, such as compliance calendar templates, vendor recommendations, sample audit report structure, and a checklist download call-to-action.