Legal Audits (Vol 1, Pt 4)

Patrick Lim
Partner at Raj, Ong & Yudistra

In our last article, we explored the general process of carrying out legal audits. In this article we take a deeper dive into each of the steps outlined in the previous article.

The first step in the general process is to identify the contracts to be audited. The breakdown is as follows:

Determine the purpose of the audit

The first step in identifying the contracts to be audited is to determine the purpose of the audit. This will help to determine which contracts should be included in the review. For example, the audit may be focused on contracts related to a specific business unit or function, or contracts with a particular vendor or supplier.

Review the company’s contract portfolio

The next step is to review the company’s contract portfolio to identify which contracts are relevant to the audit. This may involve reviewing the company’s contract management system or manually reviewing physical copies of the contracts. It is important to ensure that all relevant contracts are included in the audit.

Select the contracts to be included in the audit

Based on the purpose of the audit and the results of the review of the contract portfolio, the contracts to be included in the audit should be selected. This may involve selecting all contracts currently in effect, or a specific subset of contracts depending on the focus of the audit.

Organize the contracts

Once the contracts to be included in the audit have been selected, they should be organized in a way that makes them easy to review. This may involve creating a database or spreadsheet of the contracts, or simply organizing them in a physical file.

Overall, the first step in the process of conducting a legal contract audit is to identify which contracts need to be reviewed as part of the audit. This involves determining the purpose of the audit, reviewing the company’s contract portfolio, selecting the contracts to be included in the audit, and organizing the contracts in a way that makes them easy to review.

In the next article, we will be exploring the next step which is to gather the relevant contracts.

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