Compliance risks refer to the potential for an organization to face legal penalties, financial losses, or reputational damage due to failure to adhere to laws, regulations, and internal policies. These risks can arise from various sources, including changes in regulatory requirements, inadequate training of employees, or lack of proper oversight. Organizations must actively manage compliance risks by implementing effective compliance programs and conducting regular audits. This proactive approach helps ensure that all operations align with applicable laws and standards, thereby minimizing the likelihood of violations and fostering a culture of accountability within the organization.