Legal Audit

Legal Audit

January 1, 2006

By Dean B. Thomson

The New Business Year

The ‘06 business year is upon us. Last years’ financial statements are being tallied and we hope yours was a pleasant one. As we place old audits in the filing cabinet, we want to suggest a proactive audit for the New Year.

We assume everybody has completed their strategic business plan and set some performance goals, but it is often difficult for management to critically analyze its business risks while consumed in production. Based on this annual dilemma, we decided to do something out of the ordinary with this month’s Briefing Paper. We are enclosing a legal audit that we created for design and construction professionals. The goal of this audit is to provide you with a practical tool to analyze cross sections of your operation and identify risks that can be eliminated in 2006.

We begin our audit by looking at “the project” and some of the most common risks associated with contract documents. We then review issues found during project performance, such as differing site conditions, scheduling delays, safety and OSHA compliance, changed and extra work, and proper notification. A risk common to all projects is labor, so we also look at both Union and Merit Shop issues. We complete the project analysis by addressing the ever present payment questions.

Shifting the focus to home office operations, our audit examines insurance concerns, followed by the related topic of bonding. Next, we broadly outline the legal issues of your company as an employer. That leads us to analyze a group of corporate topics, including accounting and taxes, real estate, estate and succession planning, and banking issues.

In conclusion, we touch on the rapidly evolving field of information technology and electronic recordkeeping, which will be addressed in greater detail in a forthcoming Briefing Paper. We hope you find the audit to be a useful tool to identify and minimize the risks your business faces in the New Year.

This discussion is generalized in nature and should not be considered a substitute for professional advice. © FWH&T

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