Who Can Be Audited

Generally speaking, anyone can be audited. The ability to conduct audits is dependent upon two primary factors:
1. The inclusion of a “right-of-audit” provision in the agreement that provides an owner with specific contractual rights to perform such audits. This is often referred to as an “open book” business arrangement.
2. The willingness of the auditee to cooperate with an owner (or their authorized agent) to allow for the review and evaluation of the auditee’s books and records. This may or may not be dependent on specific contractual rights. For example, an owner may encounter a situation where a right-of-audit provision does not exist, yet the auditee is willing to allow an audit (as a good faith gesture) to demonstrate that they value the business relationship and have nothing to hide. Conversely, an owner may also encounter a situation where a right-of-audit does exist and yet the auditee refuses to cooperate, does not cooperate fully or otherwise tries to inhibit an owner’s ability to conduct such audits. Obviously, such situations may require additional measures or possibly legal action to enforce the audit provision of the contract.

Owners may wish to conduct audits of any organization that provides services to them. Specifically, this includes:
-  General Contractors
-  Construction Managers
-  Program Managers
-  Project Management Oversight Contractors
-  Remediation Contractors
-  Specialty Trade Contractor (subcontractors and suppliers)
-  Architects
-  Engineers
-  Consultants (of all types)
-  Attorneys
 

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