FAQs about Business Audits

What is a legal or business audit ?

Many businesses will be familiar with the need to have accounts audited, both in the sense that companies over a certain size and turnover must be financially audited to comply with law, but there is an additional advantage to this in the sense of spotting possible “black holes” in the accounts and/or fraud.

In the same way, a legal audit is a very cost effective method of not only identifying legal risks before those risks turn into potentially very expensive legal liabilities, but also to spot opportunities for saving money or securing a strategic business advantage.

Other advantages ?

Whilst not strictly applicable now, legal audits may well also become useful in the future for lowering professional or business insurance costs. If  a business can demonstrate good practice, ongoing risk assessment and such like, this may well lead to lower insurance premiums and potentially could be used as an excellent form of references for banks or credit or trade finance applications.

Employment law audit ?

A particularly obvious use for regular, annual legal auditing relates to employment law. There is no sign of any abatement to the regular statutory and case law adjustments to employment law, both in english law and european law. It is extremely difficult for any employer without a full time HR department to keep up with the changes and yet, failure to comply can have disastrous consequences for employers. A regular review of not only employment contracts, legislative and case law updates but also policies and procedures is money very well spent, particularly when the cost of audits is competitive. Just a couple of quick examples of recent highly significant employment law changes in the last 6 months would be :-

  • The Equality Act
  • The Bribery Act
  • The growing importance of having a properly considered and bespoke social media policy for employees.