Legal compliance audit checklist

Written by meredithbeach
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Legal compliance audit checklist
A legal compliance audit should review records, contracts and the organisation of an entity. (document image by AGphotographer from

There are many different types of legal audits to ensure to companies, condominium associations, non-profits or any other legal entity is in compliance with its bylaws. Compliance audits also ensure the entity is complying with federal, state and local laws. Legal compliance audits should be conducted by an attorney experienced in legal compliance audits.

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When conducting a legal compliance audit for businesses, the audit should include reviewing contracts the company entered into. Contracts should be reviewed for proper form and inclusion of provisions for dispute resolution, attorney's fees and the means to amend the contract to address unforeseen issues. The audit should also include a review of company operations for compliance with all contracts.

Actions of Business

Corporate operations should be reviewed for proper board meetings or partners, if appropriate, and the maintenance of minutes of meetings. Operations should also be audited to ensure the corporation is following its bylaws and articles of incorporation, which set out the form of the business and the rules that apply to decision making and management.

Government Entity

The legal compliance audit of a government entity should include a review of funding sources and allocations. This is to ensure programs are being managed in compliance with government regulations. The audit should also include a review of the financial statement of the government entity to review whether funds are being used and supervised appropriately.

Conflicts of Interest

Whether the legal compliance audit is being conducted on a private or public entity, the decisions, individuals and entity interests should be reviewed for conflicts of interest. A conflict of interest could threaten a contract the entity has entered into. A conflict of interest could be between clients or between an employee and the interests of the business or public agency.


A legal compliance audit should ensure the overall operations of the entity do not violate federal, state or local laws. The impact of laws can vary depending upon the entity being audited. Housing association legal compliance audits may review for federal fair housing and local zoning compliance, while private business may review for compliance with financial reporting requirements imposed by the state and federal government. This element of the compliance audit should also include a review of tax returns and payments to make sure they are being completed appropriately.

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