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Compliance Departments

Careers in Compliance, Legal, Tax and Audit

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Compliance Officer Careers Overview: The compliance function spans legal, internal audit and tax departments, and thus compliance departments often provide umbrella organizations for all these disciplines. The term "compliance" reflects the fact that the major responsibility of these groups is to ensure that the company operates in a manner that respects applicable laws and regulations. The financial services industry, meanwhile, is highly regulated.

Legal: The larger the company, the more likely it is to have lawyers on staff. Their responsibilities include, but are not restricted to: writing and reviewing contracts; taking the lead in lawsuits filed by or against the firm; reviewing brochures, advertising copy, product design and sales terms to ensure adherence to consumer protection laws; supervising the work of outside law firms, when they are hired for special expertise.

An in-house lawyer must perform a delicate balancing act between being overly cautious and allowing the firm to take prudent risks. In highly regulated industries, such as Financial Services, the guidance offered by corporate counsel is vital and valued accordingly.

Also recognize that, if you have sufficient business sense, a law degree and a stint in the legal department can be used as a stepping-stone into other areas of management, if you are so inclined. You can use your time in legal to develop a broad knowledge of the company's operations and strategy. You should constantly try to be a key player in the setting of strategy, since adherence to a staggering body of law has a major impact the firm.

Internal Audit: Internal audit can be a finance function, a compliance function, or a joint effort. If compliance, it reviews the firm's operations with an eye toward determining whether it has any areas of noncompliance with applicable laws, and assesses serious risks. The staffing in such departments can be a mixture of attorneys and non-lawyers. These groups can be part of the legal department, part of the financial organization, a joint effort, or completely independent of both.

Tax: Tax is a specialized area that also is an important function in large companies. There are both compliance and strategic aspects to it.

The firm must adhere to the tax laws and pay in accordance with them. Professionals are needed to file tax returns and render payment. The company may have its own in-house staff that, in turn, may work in tandem with the outside auditors.

The strategic element is that the company must understand how the tax laws influence its operations. Taxes will have a huge impact on profitability, and thus inevitably guide decision making to some degree. Highly taxed activities may have to be shunned. Operations and organizational structure may have to be altered in ways that reduce taxes.

A senior position in a tax department normally requires accounting and/or law degrees, with an emphasis on taxation issues, needless to say. This is also an area where a strategically minded person can look beyond the details of filing returns and instead become a key adviser to management, or even move into management.

Compliance Hiring Outlook: The Bureau of Labor Statistics forecasts a 31% increase in compliance employment from 2008 to 2018, largely as a result of the Dodd-Frank financial reform act of 2010. Thousands of smaller financial institutions, such as community banks, hedge funds and private equity firms, will be forced to file regular reports with regulatory agencies for the first time, under this legislation.

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