11/02/2021

Lessons for Your Legal Audit From Due Diligence Reviews

Audits can reveal troublesome issues an association has overlooked

It is wise for any association to periodically conduct a legal audit of its organization and operations to ensure that its legal affairs are in order. A legal audit serves as a checkup to make sure that your association is in good legal health. Any troublesome issues discovered during the audit can be diagnosed and resolved before they result in problems down the road.

A legal audit is similar to the legal due diligence review undertaken before major transactions, such as an association merger or consolidation. In a transaction, however, each side conducts a review of the other’s legal status, obligations, risks, and compliance. Attorneys conducting legal due diligence will review the other organization’s documents, policies, and procedures for compliance with the law and best practices. This process often uncovers legal issues that need to be addressed before or after the transaction. 

A legal audit performed as a checkup, however, is conducted by the association’s own attorneys and not shared with a third party. The results and accompanying legal advice will be protected by attorney-client privilege.

Please select this link to read the complete article from ASAE's Center for Association Leadership.