What Is a Compensating Control?

A compensating control is an alternative control used when the primary or expected control cannot be implemented, but the organization still needs to reduce risk to an acceptable level.

In simple terms, a compensating control answers one critical question:

If we cannot use the standard control, what alternative safeguard reduces the risk?

Compensating controls are common in security, compliance, audit readiness, and risk management. They help organizations address real-world limitations while still demonstrating that risks are being managed.

Why Compensating Controls Matter

Compliance frameworks often expect organizations to implement specific types of controls.

However, organizations do not always have the same systems, staffing, architecture, business processes, or technical capabilities.

A required control may not be practical in every situation.

For example:

• A legacy system may not support Multi-Factor Authentication.
• A vendor platform may not allow granular role-based access.
• A small team may not have enough people for full segregation of duties.
• A system may not support automated logging.
• A business-critical process may require temporary manual review.
• A cloud service may not allow a specific configuration expected by policy.

In these cases, the organization may need to implement a compensating control.

The goal is not to ignore the original requirement.

The goal is to reduce the same risk through another method.

Compensating Control vs. Primary Control

A primary control is the preferred or expected control.

A compensating control is an alternative control used when the primary control cannot be implemented as intended.

Control Type	Purpose
Primary Control	The standard or expected safeguard used to reduce risk
Compensating Control	An alternative safeguard used when the primary control is not feasible

For example, the primary control may require automated access removal through an identity provider.

If a legacy application does not support that integration, the organization may implement a compensating control such as a documented manual access review, manager approval, and recurring verification of user accounts.

The compensating control should address the same underlying risk.

When Compensating Controls Are Used

Compensating controls may be used when a required control is not technically, operationally, or economically feasible.

Common scenarios include:

• Legacy systems with limited security features
• Vendor tools that do not support required configurations
• Temporary business exceptions
• Transitional periods during system migrations
• Small teams with limited separation of duties
• Emergency operations
• Platform limitations
• Regulatory overlap
• Integration gaps
• Manual processes that cannot yet be automated

Compensating controls should not be used simply because the preferred control is inconvenient.

They should be justified, documented, reviewed, and approved.

Examples of Compensating Controls

Compensating controls vary depending on the risk being addressed.

Legacy System Without MFA

Primary control:

• Require MFA for all administrative access.

Issue:

• The legacy system does not support MFA.

Possible compensating controls:

• Restrict access through VPN.
• Limit access to approved IP addresses.
• Require privileged access approval.
• Monitor login activity.
• Review user access monthly.
• Plan migration to a system that supports MFA.

Limited Segregation of Duties

Primary control:

• Separate request, approval, implementation, and review responsibilities.

Issue:

• A small team does not have enough people to separate every responsibility.

Possible compensating controls:

• Require manager review.
• Maintain detailed activity logs.
• Use peer approval for high-risk changes.
• Perform monthly retrospective review.
• Require leadership approval for sensitive actions.

Vendor Tool With Limited Role Options

Primary control:

• Assign granular role-based access.

Issue:

• The vendor platform only supports broad role types.

Possible compensating controls:

• Limit the number of administrators.
• Review access more frequently.
• Require approval before granting admin rights.
• Monitor admin activity logs.
• Document business justification for each elevated user.

Manual Process Instead of Automated Control

Primary control:

• Automatically detect and remove inactive accounts.

Issue:

• The application does not support automated deprovisioning.

Possible compensating controls:

• Run monthly user exports.
• Compare active users against HR records.
• Require manager certification of access.
• Track removals in a ticketing system.
• Retain evidence of each review.

What Makes a Good Compensating Control?

A compensating control should be specific, documented, and tied to the original risk.

A good compensating control should:

• Address the same risk as the original control
• Be clearly documented
• Have an assigned owner
• Operate on a defined schedule
• Produce evidence
• Be reviewed periodically
• Be approved by appropriate stakeholders
• Be practical to operate
• Be measurable
• Be temporary when possible

The control should not be vague.

For example, "management will monitor this" is usually too broad.

A stronger compensating control would state who reviews what, how often the review happens, what evidence is retained, and how exceptions are handled.

Compensating Controls and Risk

Compensating controls are fundamentally risk-based.

The organization should identify the risk created by the missing or weakened primary control, then determine whether the alternative control sufficiently reduces that risk.

For example, if MFA cannot be enabled for a system, the risk may include unauthorized access through stolen credentials.

The compensating control should reduce that risk through alternate protections such as network restrictions, monitoring, access reviews, limited privileged accounts, and documented approval.

The question is not whether the compensating control is identical to the primary control.

The question is whether it reduces the risk to an acceptable level.

Documenting a Compensating Control

Compensating controls should be formally documented.

A compensating control record may include:

• The primary control requirement
• Why the primary control cannot be implemented
• The risk created by the gap
• The alternative control being used
• The control owner
• The control frequency
• The evidence produced
• The approval record
• The expiration or review date
• Related remediation plan
• Related exception record
• Supporting documentation

Documentation is important because auditors need to understand the rationale.

If the organization cannot explain why the compensating control exists and how it reduces risk, the control may not be accepted.

Compensating Controls and Exceptions

Compensating controls are often connected to exceptions.

An exception documents a deviation from a policy, standard, or expected control.

A compensating control explains how the organization reduces the risk created by that deviation.

For example:

• Exception: A legacy system cannot enforce MFA.
• Risk: Unauthorized access could occur if credentials are compromised.
• Compensating control: Access is restricted to VPN, admin activity is monitored, and user access is reviewed monthly.
• Remediation plan: Migrate the legacy system by a defined target date.

This creates a clearer audit trail than simply documenting that the requirement was not met.

Compensating Controls and Remediation

A compensating control may be temporary or long-term.

In many cases, a compensating control is used while the organization works toward full remediation.

For example, a company may use manual access reviews while it implements automated identity management.

The compensating control reduces risk in the meantime.

However, if the primary control is required and feasible, the organization should avoid treating the compensating control as a permanent substitute without proper review and approval.

A strong remediation plan may include:

• Target completion date
• Assigned owner
• Required system changes
• Vendor dependencies
• Budget considerations
• Interim compensating controls
• Periodic status updates
• Evidence of progress

Compensating Controls and Compliance Frameworks

Compensating controls appear across many compliance and audit environments.

SOC 2

In SOC 2, compensating controls may help address control gaps, exceptions, or limitations when the organization can show that risk is still being managed.

Examples may include manual review processes, additional approvals, monitoring, access restrictions, or enhanced oversight.

ISO 27001

In ISO 27001 programs, compensating controls may be used when treating information security risks and selecting controls appropriate to the organization's risk environment.

The organization should document the risk, chosen treatment, ownership, and evidence.

HIPAA

For HIPAA-regulated organizations, compensating controls may help address safeguard gaps related to systems that handle protected health information.

For example, if a system has limited technical controls, the organization may implement additional administrative or physical safeguards.

PCI DSS

In PCI DSS environments, compensating controls may be relevant when an organization cannot meet a specific requirement exactly as written but implements alternative controls that sufficiently address the associated risk.

These controls generally require careful documentation and review.

Evidence for Compensating Controls

During an audit, organizations may be asked to show that compensating controls were designed properly and operated effectively.

Examples of compensating control evidence include:

• Exception records
• Risk assessments
• Approval records
• Access review reports
• Monitoring logs
• Firewall or VPN configuration screenshots
• Manual review checklists
• Ticket history
• Remediation plans
• Control owner attestations
• Management review records
• Vendor documentation
• Policy references
• Audit trail records
• Evidence of recurring operation

The evidence should show that the compensating control was not just described, but actually performed.

Common Compensating Control Failures

Organizations frequently encounter the following issues.

The Control Does Not Address the Same Risk

The alternative control exists, but it does not meaningfully reduce the risk created by the missing primary control.

The Control Is Too Vague

The compensating control is described in general terms, but no one knows who performs it, how often it occurs, or what evidence is retained.

No Approval Exists

The organization implemented an alternative process, but there is no formal approval or risk acceptance.

No Evidence Is Retained

The control may be operating, but the organization cannot prove it.

The Control Becomes Permanent Without Review

A temporary workaround remains in place for years without reassessment.

The Remediation Plan Is Missing

The organization uses a compensating control but has no plan to address the underlying gap.

These failures can weaken the control environment and create audit risk.

Compensating Controls and the Audit Period

For period-based audits, compensating controls must operate during the audit period.

For example, if a compensating control requires monthly access reviews, the organization should be able to provide evidence for the months in scope.

Auditors may review:

• When the compensating control was approved
• Whether the control operated during the audit period
• Whether evidence was retained
• Whether exceptions were tracked
• Whether the control owner performed the required activity
• Whether management reviewed the risk
• Whether remediation progress was tracked

A compensating control created after the audit period may help with future readiness, but it may not prove that risk was managed during the period under review.

How AuditFlo Helps

AuditFlo helps organizations collect, organize, and maintain compensating control evidence throughout the audit period.

By connecting systems such as GitHub, AWS, Okta, Google Workspace, and Jira, AuditFlo helps teams centralize evidence related to exceptions, approvals, remediation work, access reviews, monitoring activity, change management, and control ownership.

For compensating controls, AuditFlo can help organize evidence such as:

• Exception records
• Risk assessments
• Compensating control descriptions
• Approval records
• Access review evidence
• Monitoring logs
• Remediation tickets
• Owner assignments
• Review schedules
• Control activity records
• Audit period evidence

Instead of waiting until audit time to explain why a primary control was not implemented, teams can maintain a documented evidence trail showing how risk was managed over time.

This helps organizations demonstrate that compensating controls were defined, approved, operated, and reviewed throughout the audit period.

Key Takeaway

A compensating control is an alternative safeguard used when the primary control cannot be implemented as intended.

Strong compensating controls are risk-based, specific, documented, approved, and supported by evidence.

For compliance teams, the goal is not to use compensating controls as shortcuts. The goal is to responsibly manage risk when standard controls are not feasible and to prove that the alternative control operated effectively over time.