Every business is exposed to a number of legal risks. How to effectively manage such risks ensure appropriate protection of the organization and at the same time encourage its growth? One of the tools to facilitate this is a legal audit.
Risk management obligations result from the applicable regulations, but more and more often they are also required by the market. Currently, most corporations and large companies expect their business partners to at least adapt their security management to generally accepted standards, e.g. ISO 27001. This results in the need for companies to introduce formalized procedures, greater discipline, a better internal control ratio, and to take appropriate measures against managers and employees in the event of violations.
Risk management is an issue for which all members of a given organization should be responsible – including members of the management board and operational managers.
Failure to comply with the applicable requirements and standards may pose a threat to the reputation and even the very existence of an organization. At the same time, it may result in liability for damages of a given entity towards its trading partners and in some cases even administrative or criminal liability of members of the management board and possibly individual managers.
How to verify that an organization meets the requirements set by the applicable regulations and trading partners and how does this process take place? The most effective tool is to conduct a legal audit (legal due diligence), where an external auditor will comprehensively examine the condition of the company and its individual assets. As a result, it will help to identify and eliminate already existing or potential legal risks.
Legal audit may help to:
Legal audit is also essential when selling a company or its assets.
Legal due diligence allows, above all, to obtain comprehensive information about the company and its activities. It supports the transparency policy of the company’s activities and its bodies and helps to assess the profitability of actions taken and contracts concluded.
The scope of a legal audit will also depend on individual needs of the organization and will take into account the specific issues of the industry in which the company operates. It may cover the entire operations of the company or focus on selected aspects.
Learn more: Legal audit – how can we help?