The Purpose of Compliance is to meet the requirements of governmental and Other regulatory bodies. Compliances can be further classified in two broad categories:
Regulatory Compliance covers the range of activities necessary to produce , communicate and verify financial information to meet the local and regulatory requirements ( excluding tax, which has been covered separately). It includes completion of statutory accounts, processing of returns and information for compliance of regulatory acts applicable like Foreign Contribution and Regulation Act, labour Laws to mention some.
Tax relates to both complying with the tax requirements of the relevant national authority and Tax planning .Tax reporting and compliance involves the analysis and aggregation of financial transactions in order to compute potential tax liabilities, meet the payment obligations, filing of necessary returns, handling assessments etc. With multiplicity of applicable taxes ( Direct and Indirect) tax compliance have become a more complex but an integral part of finance function.