Answer:
The rules and regulations associated with employee protection and environmental concerns is called compliance risk.
Explanation:
Compliance risk is the exposure to legal penalties when a company decides not to comply with the rules and regulations. In order to avoid the law suits and possible penalties, companies first need to consider the following;
1. Obligation
2. The rules and regulation
3. Penalties for not complying
4. Current compliance status
Once one all these factors are considered and well defined, then the risks can be greatly reduced. Most companies fall victim to compliance risk simply because they are not aware of the rules and regulations. There are different kinds of risks depending on the nature of the business. All of them cannot be considered, but we can highlight a few key risks that are often considered in most companies. They are;
1. Suspicious transactions should be flagged by the company to ensure that the government treasury and fraud agencies are aware of the transaction.
2. Most regulations also consider employees working in areas that have hazardous conditions. There are standards that are to be met in order to ensure that the possibility of harm to the employees working in these conditions is greatly reduced. This is an example of employee protection risk.
3. Environmental regulations are those that tend to reduce the impact that industrial waste has on the environment. This involves the use of environmental regulations to ensure that toxic waste is treated by the companies before they are released to the environment.
