Internal Investigations: Disclosures to External Auditors

Litigation attorneys Barbara Martinez and Sarah Molinoff co-authored an article for LexisNexis providing factors for outside counsel to consider when making disclosures to external auditors. When companies conduct internal investigations, typically with outside counsel, they must make critical decisions about what to disclose to external auditors. During the investigation, the obligations of the lawyers and auditors can sometimes overlap and other times appear to be at odds. The authors explain that simply withholding information from auditors is not prudent and caution counsel to keep in mind the auditor's role, along with the legal and practical implications of disclosure. The article reviews laws and industry standards regulating auditors' responsibilities, considerations like the attorney-client privilege and potential issues that may arise with disclosure. The attorneys also cover real-life cases that provide cautionary tales and explain how to avoid some of these pitfalls.

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