Legal
Compliance Audit Checklist
Introduction
A legal audit is
an appraisal of an organization’s operations to determine its compliance with
the laws and regulations that apply to it. The audit checklist guides the
evaluation process by checking the company’s performance against legal
standards and identifying areas where adherence needs to be stricter. Many
areas are subject to legal oversight, but the main areas an organizational
legal audit compliance checklist should cover are labor, environment, health
and safety, corporate governance and data security.
Labor law requirements are arguably the main area of compliance
risk given that many laws relate to the protection of workers and the
Department of Labor regularly audits organizations to determine whether or not
they are obeying these laws. In addition, employees can file claims with
numerous enforcement agencies for labor law violations in the workplace.
Consequently, a legal compliance audit checklist should facilitate thorough
examination of the organization’s human resources management practices,
employee relations, collective bargaining, equality policies and other areas of
labor law.
Health, safety and environmental protections are another area of
concern when conducting audits to ascertain organizational compliance with laws
and regulations. Businesses are subject to numerous environmental, health and
safety laws contained in numerous statutes, policy briefs, treaties and
directives, and it can be confusing to distinguish the ones that apply to a
particular company. In conducting the audit, the legal manager or attorney may
use a checklist that covers the laws by subject area so he can effectively
address every potential compliance risk.
Organizations are expected to comply with federal and state
corporate governance laws even as they also observe a moral and ethical code of
conduct in the interests of transparency, accountability and sustainability.
Therefore, a legal compliance audit checklist should probe various areas of the
organization’s corporate governance practices. The checklist may look into the
registration of the business to determine whether it was lawful. It can also
look into the appointment of directors, election of organizational officers,
procurement and investment practices, shareholders’ meetings, tax remittances,
decisions relating to profit distribution and performance of corporate social
responsibilities.
Records facilitate business continuity, because they are a source
of information for past and present activities. In keeping with best practices,
businesses ought to maintain proper, comprehensive and updated information about
their operations and ensure the integrity of these data so they are not lost or
corrupted. Most companies use information communication technologies to
generate, transmit and store their data. The law require
all entities in possession of client data to ensure that it remains private and
confidential and is used for the right purposes. Therefore, a legal compliance
checklist should take account of all the organizational data use and security
measures to evaluate whether they are up to standards and to identify potential
risk areas.