page_title: Regulatory risk differentiation
section_title: Risk bow-tie diagram
hierarchical_section_title: Regulatory risk differentiation / Alternative compliance models / Risk bow-tie diagram
caption_attribution_description: English: Risk bow-tie for regulatory compliance strategies - deter, detect &amp; deal with
context_page_description: Regulatory risk differentiation is the process used by a regulatory authority to systemically treat entities differently based on the regulator's assessment of the risks of the entity's non-compliance.
  Regulators can include law enforcement agencies. Entities refers to those under the authority/control of the regulator – in most cases ranging from individuals to companies to legal entities to multinationals operating within the regulator's jurisdiction.
  The process requires the regulator to directly link a robust risk assessment to a suggested regulatory response. Regulatory risk differentiation is also referred to as the Compliance Model in some regulatory agencies. See for example the Australian Prudential Regulatory Authority risk differentiation approach known as: PAIRS / SOARS. PAIRS is the Probability And Impact Rating System, while SOARS is the Supervisory Oversight And Response System.
context_section_description: Another way of looking at this is as a risk bow-tie.  See bow tie diagrams in risk management
  .
  Organisations in oil and gas, mining, aviation, industrials and finance have had success using bowties.
  These compliance enhancement strategies fit into a standard structure:
  deter, (educate, exemplify, engage, encourage, enable, empower)
  detect, (using quantitative and qualitative intelligence) and
  deal with (educate, exemplify, engage, encourage, enable, empower, enforce)
caption: Generic Tax Compliance Risk Bow-Tie used by the ATO
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