For businesses to stay in line with the requirements of the Competition and Consumer Act, a thorough audit or programme to assure legal compliance with the law is essential. This blog post will go through why audits are so crucial, what auditors can learn, the costs of not auditing, and the steps involved in an audit.
Companies must conduct an audit to determine whether or not they have broken the rules set out in the Act. A second motivation for conducting such an audit is to protect businesses from having to pay astronomical fines for violations. This is done to analyse the company’s status in light of the Act.
The Competition Compliance Programmes (CCPs) focus on reducing anti competitive behaviour, bolstering organisations’ auditing and compliance cultures, and inspiring responsible business practises. The CCI has published a document outlining the requirements for CCP. However, the guide is by no means complete and thorough.
After reviewing each section of the CCI compliance handbook, it becomes clear that neither the general steps nor the specifics of conducting a competition law audit are spelled out in depth. As a result, it is vital to have a global perspective to learn about the standard operating procedure and auditing steps used worldwide. In most cases, a compliance audit will go through the following steps:
The Competition and Consumer Commission of Australia’s Functions
The Australian Competition and Consumer Commission (ACCC) is a government agency dedicated to fostering open markets and trustworthy interactions between companies and customers in Australia. The primary role of the ACCC with legal compliance is to monitor and enforce compliance with the Competition and Consumer Act 2010, which governs consumer protection, fair dealing, and competition in Australia.
It is the responsibility of the ACCC to
● Guide companies through the process of bringing a claim for compensation by the Act and educate them on their obligations in doing so.
● Inform customers of their protections under the Act, and
● Look into companies’ possible Act-violating behaviour and take action against them if necessary.
Basic Preparation and Planning:
At this point, you should have determined your audit’s purpose, scope, methodology, stages, timeline, and auditor. To ensure that the auditing process runs well, it is necessary to have a single, in control authority. Anyone with the necessary credentials and understanding of competition law, such as in-house counsel or an outside counsel, falls under this category.
Files are examined for errors:
Identifying the papers is the first and maybe most crucial step. Many records might exist inside a company. It is the responsibility of the auditor, however, to first determine whether documents are pertinent to the audit at hand. Major agreements, other agreements with rivals, sales reports, non-compete covenants, major competition rules, transaction paperwork, bid paperwork, trade association paperwork, price determination paperwork, etc.
Collecting Data:
Select personnel are interviewed in order to get information that is not readily accessible in the records. Unofficial deals that might have an impact on the market are investigated.
The audit’s final verdict:
If there has been a breach of the Act, the auditor will have determined it after going through the aforementioned steps. Either no Act violations have occurred, or there have been violations, or there is potential for Act violations to occur.
Conclusion
In conclusion, it is essential for businesses to conduct an analysis of their most significant exposures to violations of competition law and institute a rigorous compliance programme to effectively mitigate and manage these threats. A legal compliance may be implemented more efficiently and cheaply with the use of digital solutions, which are especially helpful for multinationals and businesses with huge workforces.
Integrating the compliance policy into the risk management and legal compliance processes of the company is essential. All workers should be made aware that it is everyone’s obligation to act in accordance with competition law, and all documents and processes connected to the compliance programme should be recorded in a clear and easily accessible manner.
