When and How Should Companies Include Audit Rights in Third-Party Contracts? (Part One of Three)

In November 2013, Kara Brockmeyer, Chief of the SEC's FCPA Unit, reported that 60%-70% of the SEC's FCPA cases in the past two years have involved third-party intermediaries.  As detailed in our series about anti-corruption reps and warranties in third-party contracts (Part One and Part Two), including the appropriate reps and warranties in contracts can be a key tool to mitigate the risks caused by employing third parties.  Clauses pertaining to audit rights are some of the most difficult to get right, and can be some of the most important.  To assist companies in optimizing this compliance tool, the Anti-Corruption Report is publishing a three-part series on when and how companies should include audit rights in their third-party contracts.  This, the first article in the series, discusses how companies should determine which third-party relationships require audit rights and outlines the benefits and drawbacks of including audit rights provisions in contracts.

To read the full article

Continue reading your article with an ACR subscription.