What does the term 'regulatory requirements' typically encompass?

The term 'regulatory requirements' typically refers to mandatory rules that organizations must follow. These regulations are established by governmental bodies or regulatory agencies to ensure compliance with laws designed to protect public interest, maintain safety, and promote fair practices. Organizations are legally obligated to adhere to these requirements, which may involve reporting, conducting audits, and maintaining specific operational standards.

Failure to comply with regulatory requirements can result in legal consequences, penalties, or serious harm to an organization’s reputation. Regulatory requirements are enforced through various mechanisms, including routine inspections and audits, making them distinct from voluntary best practices or informal standards that do not carry the same level of accountability.