Legal auditing is a management practice of litigation which is used by insurance and other consumers of services which are legal. In legal audit the company’s management team meets with the corporate counsel in order to strategize plans and objectives and review all important documents and records to meet the legal needs of the company. It is also the groundwork for all the necessary legal compliance of the company. The role of legal audit managers is to help
find out the legal issues in the developments and plans of the business and corporate law. Issues in a legal audit:

The legal audit identifies all those issues which can be mundane, those which decide whether the company is eligible to do business in foreign countries or not. The complexity and extent of a legal audit depends on the growth of the business, size and stage of a business, the extent of the company’s business and the number of shareholders etc. A legal audit can be performed as a part of the compliance programme or can be performed with financial audit and any such related event.

There are, however, some risks if legal auditing is not complied to, such as:

? Mixing of assets could lead to a litigation among co-owners or can also lead to removal of limited liability protection.

? If all licences and permit are not obtained it could lead to the fines, penalties ot even shutting down of the business.

? If the laws and regulations and not complied with, there may be problems under federal law agencies.

? If the directors fail to keep accurate records and minutes of the procedure or meeting, the directors are proved to be exercising informant judgement and can lead to problems for the board, the shareholders and the investors.

The legal auditing process is not easy as there are various records that are associated to it and avoiding any issue can lead to many issues and risks for the company to bear. Hence, complying with all legal norms and rules are not only necessary, but can also prove to be beneficial.