Legal audits are carried out for enabling organisations and companies to comply with legal regulations and requirements. Audit litigation is to do with mitigation of risks and formulation of customised guidelines. The purview includes monitoring changes in industry’s rules and regulations, assessing and identifying potential exposures to which corporates and organisations are exposed and making sure that that these are aptly addressed.
Requisite qualification and expertise:
It is important to ensure that the task of litigation is carried out by people qualified to conduct the job. The execution has to be planned and defined with precision. It would be important to perform on site observations of daily operations, arrange conferences and meetings with key personnel, review current financials of the company and also spend quality time with the accounts workforce.
Effective execution would require expertise and specialised knowledge and hence the experience and knowledge of the person conducting the audit is of immense importance.
Keeping cost in mind:
The best method of pricing would be to design it on a flat fee basis. Litigation audit is not a task that should be looked upon as one which involves a big team of associates. It actually involves hiring an experienced counsel who is qualified enough not only to express a learned opinion to offer a focussed and streamlined analysis but also act as a lead counsel. It should be kept in mind that litigation audit is basically a second opinion and hence should be offered against a contained cost. An audit litigator should price his opinion optimally so that cost does not act as a hindrance in Organisations hiring them for future assignments.
Size of the firm offering litigation services:
Size and scale of the firm carrying out litigation audits is also an important consideration. It is best to render services as a specialised boutique firm. An organisation would attempt to minimise its litigation cost by hiring inexpensive yet high quality audit litigators. Hence, the chances of attaining success in India is far higher for small- mid sized firms.
Array of services across industries:
Audit litigators or litigation firms work to simplify the organisation’s regulatory processes, reduce risks, curtail costs and aim at establishing a long term strategy for ensuring compliance successfully. Specialised services linked to audit litigation should include-
· Strategic analysis.
· Assessment of potential exposures to limit liabilities involving various authorities, staff members, customers, visitors and other members.
· Identification of weak spots by testing compliance programs.
· Check compliances specific to the industry.
· Continuous legal research for monitoring compliances.
· Immediate reporting of suspecting compliance violations.
· Training of internal staff of the organisation to ensure complete knowledge transfer of applicable laws and regulations.
Audit checks are conducted in such a manner that the Client understands all prevalent laws and regulations, inconsistencies if any are to be highlighted and steps for correction and prevention are suggested. Legal audits are not a onetime activity but are required recurrently to ensure adherence to laws and regulations. Hence, if the Client sees a lack of knowledge, expertise of comfort in dealing with audit litigators, it would result in loss of work from the auditor’s perspective.
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