The aim of legal audits is to make sure everything is in compliance and the business, its owners, and assets are all clearly protected. All the books and records are checked, licenses and permits verified, and assets checked to see if they still belong to the business with a clear title.
Every agreement is checked to make sure the business and its partners are not in breach of any contract. This process helps and protects the business in many ways, as listed below:
The process of a legal audit is broken up into standard segments. One segment requires an audit of the company's financial records to ensure regulatory compliance and unearth discrepancies or fraud. Another section deals with tax issues, to see whether the business is paying all the required taxes and if there are any exemptions which it is not taking advantage of. An audit of the business insurance in place sheds light on existing or new risks that may have arisen.
Then there will be the basics, including minutes of meetings and incorporation documents, updates to shareholder agreements, and so on. Business conduct audits include safeguarding of trademarks, patents, and licensing. Other segments can litigation documents, employee contracts, asset purchase or lease agreements and so on.
Did you know?
Legal audits can increase the value of your company.
By reducing risk, unearthing tax exemptions, enforcing intellectual property rights and eliminating waste and fraud in business processes, legal audits boost a company's revenue and profits and add value.