How often should you conduct a IT compliance audit?

Imagine this: A major company gets hit with a $10 million fine for non-compliance. Their mistake? Skipping regular security audits and failing to meet compliance requirements. Unfortunately, they aren’t alone, non-compliance penalties have skyrocketed in recent years, with global regulations tightening to combat rising cyber threats. In January 2025, Block Inc. agreed to pay $80 million to 48 U.S. state regulators due to weak money laundering controls on its Cash App.^[1]

For businesses of all sizes, compliance audits aren’t just a regulatory checkbox; they are a crucial part of maintaining data security, avoiding legal trouble, and preserving customer trust. But how often should you conduct an IT compliance audit? And what happens if you don’t? Let’s break it down.

What is a compliance audit?

Before we discuss frequency, let’s clarify what a compliance audit entails.

A compliance audit is a systematic review of an organization’s adherence to security policies, regulations, and industry standards. It ensures businesses meet legal requirements and follow cybersecurity best practices to protect sensitive data.

Compliance audits often overlap with security audits, which assess vulnerabilities in an organization’s IT infrastructure. While a security audit focuses on risk mitigation, a compliance audit ensures adherence to standards like GDPR, HIPAA, SOC 2, and PCI DSS.

Regular security audits and compliance checks are essential for businesses handling sensitive customer data, financial transactions, or proprietary information. But how often should they be conducted?

Factors that determine audit frequency

There is no universal rule for how often a business should conduct a compliance audit. The frequency depends on multiple factors, including industry mandates, company size, cybersecurity risks, and regulatory changes. Below are the key elements influencing audit schedules:

1. Industry regulations

Each industry has specific compliance requirements that dictate how often audits should be conducted. Some sectors mandate annual reviews, while others require continuous monitoring and frequent assessments. The stricter the regulatory framework, the more frequent the compliance audits.

• Healthcare (HIPAA) – The Health Insurance Portability and Accountability Act (HIPAA) requires organizations handling patient health data (hospitals, clinics, insurance providers, etc.) to conduct annual audits and periodic risk assessments. Healthcare organizations must also conduct routine vulnerability scans to ensure compliance with HIPAA Security and Privacy Rules. A breach or patient data mishandling incident may trigger an immediate compliance review.
  
• Finance & banking (SOX, PCI DSS, GLBA) – Financial institutions must comply with regulations such as Sarbanes-Oxley Act (SOX), Payment Card Industry Data Security Standard (PCI DSS), and Gramm-Leach-Bliley Act (GLBA). These frameworks demand quarterly or annual security audits, penetration testing, and continuous monitoring of financial transactions. Banks and financial service providers often conduct additional compliance audits following fraud detection or regulatory amendments.
  
• Retail & E-commerce (PCI DSS) – Any business that processes, stores, or transmits credit card information must comply with PCI DSS, which mandates annual security audits and frequent vulnerability scans. Companies processing large volumes of transactions or handling sensitive payment information may need more regular security audits to protect against credit card fraud and data breaches.
  
• Government & defense (NIST, CMMC) – Government contractors and defense organizations follow stringent compliance frameworks such as National Institute of Standards and Technology (NIST) 800-171 and Cybersecurity Maturity Model Certification (CMMC). These require frequent compliance assessments, often conducted semi-annually or even quarterly, due to the high sensitivity of national security data.

Organizations operating in regulated industries should adhere to the recommended audit timelines set by their governing bodies to avoid penalties and ensure continuous compliance.

2. Company size & IT complexity

The larger and more complex an organization, the greater the need for frequent compliance audits. Factors that influence audit frequency in large enterprises include:

• Number of employees & devices: Businesses with many employees, especially those working remotely, have a larger attack surface, necessitating more frequent security audits.
  
• Third-party vendors & integrations: Organizations that rely on multiple third-party vendors for cloud services, payment processing, or data storage must ensure compliance across all external partners. This requires quarterly or biannual audits to validate third-party security measures.
  
• Cloud-based & hybrid IT infrastructure: Companies operating in a multi-cloud or hybrid IT environment face increased compliance challenges due to data being stored and processed across different jurisdictions. As a result, they must conduct continuous security assessments and biannual compliance audits.
  
• Mergers & acquisitions (M&A): Companies undergoing mergers or acquisitions must conduct pre- and post-integration compliance audits to ensure the newly combined entity adheres to regulatory requirements and has no hidden cybersecurity vulnerabilities.

For smaller companies with simpler IT infrastructures, annual compliance audits may suffice. However, as the organization grows, the frequency of audits should increase accordingly.

3. Cybersecurity threats & breaches

Threats are constantly evolving, with cybercriminals targeting organizations across all industries. Businesses must adjust their security audit frequency based on:

• Industry-specific threat levels: Industries such as finance, healthcare, and technology are high-priority targets for cyberattacks. Organizations in these sectors should conduct quarterly security audits to mitigate risks.
  
• History of security incidents: If a company has experienced a data breach, ransomware attack, or insider threat incident, an immediate compliance audit should be conducted to identify vulnerabilities and implement corrective actions.
  
• Emerging threats & new attack vectors: The rise of AI-driven cyber threats, zero-day vulnerabilities, and social engineering attacks makes continuous security monitoring crucial for businesses handling sensitive data. Organizations should be prepared to conduct ad-hoc security audits in response to new threats.
  
• Remote workforce & Bring Your Own Device (BYOD) policies: Companies with remote employees and BYOD policies face additional security challenges, requiring more frequent compliance checks to prevent unauthorized access and data leaks.

4. Regulatory updates & legal changes

Regulatory requirements are not static, they evolve based on technological advancements, geopolitical risks, and industry best practices. Compliance audit frequency should align with:

• Major regulatory changes: If a new data privacy law, such as GDPR or CCPA, introduces stricter compliance requirements, companies must conduct immediate audits to ensure adherence.
  
• International expansion: Businesses expanding into new regions with different compliance regulations (e.g., moving from the U.S. to the EU) must perform regional compliance audits to meet local standards.
  
• Industry-specific policy updates: If regulatory agencies such as the SEC, FTC, or FDA issue new cybersecurity or compliance guidelines, businesses should conduct gap assessments and compliance reviews before the new rules take effect.

Staying informed about compliance updates and regulatory changes ensures organizations remain audit-ready and avoid penalties.

5. Past audit performance & compliance history

An organization’s past compliance performance is a strong indicator of how frequently audits should be conducted:

• Significant compliance gaps in previous audits: If past audits revealed major security vulnerabilities or regulatory failures, follow-up audits should be conducted within 3-6 months to verify remediation efforts.
  
• Strong compliance record: Businesses with a history of passing audits with minimal issues may qualify for less frequent compliance audits, such as every 12-18 months instead of annually.
  
• Audit failures & repeat non-compliance: Organizations that fail compliance audits or repeatedly violate industry regulations should implement monthly internal audits until compliance is restored. Regulatory bodies may also impose stricter audit schedules for repeat offenders.

Companies should track audit results and implement continuous improvements to reduce compliance risks over time.

Recommended compliance audit frequency by industry

While compliance audit schedules depend on various factors, here are general guidelines based on industry best practices:

These recommendations ensure businesses stay compliant while mitigating security risks.

Key steps in an IT compliance audit

Conducting an IT compliance audit requires a structured, multi-phase approach to identify risks, validate regulatory adherence, and implement corrective actions. Each step plays a crucial role in maintaining compliance and safeguarding sensitive data.

1. Pre-audit preparation

Proper planning ensures a smooth and efficient audit process. This phase involves gathering documentation, defining the audit scope, and ensuring stakeholders know compliance requirements.

• Define audit scope: Determine the areas to be audited, including network security, access controls, data handling practices, third-party vendors, and regulatory requirements applicable to the organization (e.g., HIPAA, PCI DSS, SOC 2).
  
• Assemble compliance documentation: Collect all necessary records, such as IT security policies, data encryption protocols, incident response plans, and user access logs.
  
• Identify key stakeholders: Engage IT administrators, security officers, compliance managers, and legal teams who will be involved in the audit process.
  
• Review previous audit reports: Analyze past compliance audit findings to identify previously detected risks and verify if corrective actions were implemented successfully.
  
• Notify departments & set timelines: Inform internal teams about the upcoming audit and define a clear timeline to ensure data collection and review processes align with operational workflows.

2. Risk assessment

Before conducting the actual audit, organizations must evaluate potential threats and vulnerabilities that could lead to compliance violations.

• Conduct security audits: Perform regular security audits to identify weaknesses in firewalls, endpoint protection, access control systems, and encryption methods.
  
• Assess compliance risks: Identify regulatory gaps by cross-referencing IT policies against legal and industry standards. Determine if the organization is adhering to GDPR, CCPA, ISO 27001, or other applicable frameworks.
  
• Evaluate third-party compliance: If the company uses external service providers (e.g., cloud storage, payment processors), review their security measures and compliance certifications to mitigate third-party risks.
  
• Measure business impact: Analyze how compliance failures could impact financial stability, reputation, customer trust, and operational continuity.

3. Testing & verification

This phase involves hands-on testing to validate security measures and compliance policies.

• Perform penetration testing & vulnerability scanning: Use ethical hacking techniques to simulate cyberattacks and identify exploitable weaknesses in network infrastructure.
  
• Assess IT security controls: Verify firewall rules, endpoint protection configurations, intrusion detection/prevention systems (IDS/IPS), and identity & access management (IAM) policies.
  
• Verify encryption & data protection measures: Ensure that data at rest and in transit are encrypted using industry-standard protocols (e.g., AES-256, TLS 1.2+).
  
• Check user access & privileges: Conduct role-based access control (RBAC) reviews to confirm that only authorized personnel can access sensitive systems. Excessive privileges or outdated user accounts should be flagged for remediation.
  
• Test incident response & disaster recovery plans: Conduct tabletop exercises to evaluate how well the organization responds to security incidents, data breaches, and system failures.
  
• Cross-check compliance against regulatory checklists: Use predefined compliance frameworks and audit checklists to confirm adherence to required security standards.

4. Audit reporting

The audit findings must be documented comprehensively, focusing on identifying risks and recommending corrective actions.

• Summarize key findings: Provide a detailed report outlining non-compliance issues, security vulnerabilities, and process inefficiencies.
  
• Highlight high-risk areas: Prioritize findings based on severity level (low, medium, high, critical) and provide a risk matrix to help executives understand the urgency of compliance gaps.
  
• Detail compliance violations & root causes: Clearly explain which policies, regulations, or security measures were not met and analyze the root cause of each issue.
  
• Provide actionable recommendations: Suggest specific remediation steps such as patching vulnerabilities, updating policies, implementing additional security controls, or training employees on compliance best practices.
  
• Deliver findings to leadership & compliance teams: Share the audit report with CISOs, compliance officers, and IT management teams to ensure corrective actions are prioritized.

5. Remediation & follow-up

After identifying compliance gaps, businesses must take corrective action and plan for future audits.

• Implement corrective measures: Address vulnerabilities by applying software patches, strengthening security configurations, updating policies, or enhancing employee training programs.
  
• Monitor remediation efforts: Establish a compliance monitoring system to track whether fixes have been applied correctly and if security controls are functioning as intended.
  
• Schedule follow-up audits: Depending on the severity of compliance issues, schedule a follow-up audit within 3 to 6 months to verify improvements.
  
• Establish a continuous compliance program: Implement automated compliance monitoring tools that track real-time security posture, detect non-compliance events, and generate alerts before they become major issues.

Benefits of regular security audits

Frequent compliance audits offer numerous advantages, including:

• Stronger data security: Regular reviews reduce the risk of cyber threats and data breaches.
  
• Regulatory compliance: Helps businesses avoid costly fines and legal consequences.
  
• Improved customer trust: Demonstrating compliance reassures customers that their data is protected.
  
• Operational efficiency: Identifies inefficiencies in security processes and improves overall risk management.

How to stay on top of IT compliance audits

Maintaining compliance doesn’t have to be overwhelming. Here are some best practices to ensure your business remains audit-ready:

1. Leverage compliance automation tools

Automated compliance solutions help track regulatory requirements, monitor security controls, and generate audit reports effortlessly.

2. Implement continuous monitoring

Instead of relying on periodic audits, continuous monitoring detects security vulnerabilities in real time, reducing compliance risks.

3. Engage third-party auditors

External auditors provide an unbiased assessment of your compliance posture and help identify blind spots.

4. Train employees regularly

Human error is a leading cause of compliance failures. Ongoing staff training ensures employees understand security policies and compliance responsibilities.

Prioritizing IT compliance audit for long-term security and trust

So, how often do you need a compliance audit? It depends on multiple factors, including industry regulations, company size, evolving cyber threats, and past compliance performance. However, one thing remains certain: regular security audits are a non-negotiable necessity.

Ignoring compliance can have severe consequences, such as data breaches, legal penalties, financial losses, and reputational damage. On the other hand, businesses that embrace proactive compliance strengthen their cybersecurity posture, improve operational efficiency, and build lasting customer trust.

If you haven’t scheduled your next IT compliance audit, now is the time to act. Cyber threats and regulations are constantly evolving, and staying ahead requires a commitment to continuous monitoring, timely risk assessments, and adherence to industry best practices.

Ready to take control of your compliance strategy? Register your interest today and see how Scalefusion Veltar can help you with IT compliance and compliance automation.

Reference:
1.Digwatch