Regulators are upping their game - and audits are the latest weapon in their arsenal.

Once reserved for financial reviews and ISO checklists, audits are now taking centre stage in tech regulation. From content moderation and algorithmic accountability to AI governance and online safety, in-house lawyers are facing a new era of scrutiny that goes far beyond the privacy policies and DPIAs of old.

Here’s what’s changing – and how to get ahead of it.

Audits are no longer just good practice – they’re baked into the law

New regulatory regimes, including the EU Digital Services Act (DSA) and UK Online Safety Act (OSA), make audits a formal requirement. Whether it’s self-assessments, regulator-led reviews or independent external audits, the message is clear: trust will be earned through transparency.

 And it’s not just Europe. In New York, companies using AI in hiring now need annual bias audits. And the EU AI Act requires pre-market assessments and ongoing monitoring of high-risk systems.

Why this matters for in-house legal teams

Audits are different from one-off compliance checks. They’re deeper, more technical, and more public, especially when regulators or external assessors are involved. For in-house lawyers, that means:

• You can’t rely on a neatly filed policy alone. You need evidence of how things actually work in practice, and where the risks sit.
• You’ll need to partner closely with product, data and engineering teams to build compliance into systems from day one.
• Regulatory engagement is no longer passive. Being audit-ready means being proactive, not just responsive.

What this means for your tech contracts

If audits are the new normal, your contracts need to keep up.

For in-house lawyers negotiating with tech vendors or platform providers, audit-readiness isn’t just an internal concern - it’s a contractual one. With regulators expecting companies to take responsibility for their full digital ecosystem, you’ll need to ensure your third-party agreements can stand up to scrutiny.

Here’s what to look out for:

• Audit rights: Make sure you’ve secured the right to audit vendors - or at least to obtain independent assurance reports - particularly where they process personal data, provide AI systems, or contribute to safety-critical infrastructure.
• Information sharing: You may be required to demonstrate compliance across your supply chain. Your contracts should include clear obligations on data access, cooperation during regulatory reviews, and timely responses to audit findings.
• Indemnities and risk allocation: If your vendor’s failure lands you in regulatory hot water, who’s picking up the pieces? Clear, well-drafted liability clauses are crucial to avoid being left exposed.
• Termination levers: If a vendor can’t - or won’t - support you in meeting your audit obligations, you’ll need a way out. Make sure your exit rights are watertight, particularly where regulatory risk is high.

In short? Build audit-readiness into your contracts now, before a regulator asks for the paperwork.

If you’re the tech provider, here’s what to watch

If you’re on the other side of the table, as the tech vendor, SaaS provider or platform owner, these evolving audit expectations bring a fresh layer of complexity to your contracting position.

Buyers are becoming savvier, and regulators are intensifying their scrutiny. That means more scrutiny, more questions, and more pressure to accept obligations that may carry significant operational and legal risk.

Here’s what to keep in mind:

• Audit clauses are now business-critical: Customers are increasingly asking for broad audit rights, including access to systems, personnel, and third-party providers. While transparency is important, you’ll need to carefully scope these clauses to avoid open-ended exposure or unmanageable workloads. Consider tiered responses, access protocols, and limits on frequency and confidentiality.
• You’ll need to prove your compliance credentials: Whether it’s SOC 2 reports, DPIAs, AI model documentation or safety risk assessments, expect to be asked for more evidence than ever before. Build a toolkit of reusable compliance artefacts and keep them updated - it’ll save you time, build trust and reduce contract friction.
• Push back on pass-through liability: Customers may try to pass their own regulatory burdens onto you wholesale, including indemnities for audit failures or non-compliance. Be ready to negotiate a fair allocation of responsibility, especially where you have limited control over the customer’s own use of your product.
• Review your upstream contracts: You can’t offer audit access to your infrastructure providers or sub-processors unless you’ve got the right rights in place. Make sure your supply chain contracts are audit-aware, otherwise, you risk overpromising to customers and underdelivering when it counts.

In-house lawyers at tech companies are walking a fine line, balancing commercial growth with regulatory credibility. Strong contracts are your first line of defence, but they’ll only work if they reflect what’s actually happening behind the scenes.

Final word? Treat audits as an opportunity, not just a risk

Being ready for an audit isn’t just about avoiding fines or reputational damage. It’s a chance to build confidence with customers, investors and regulators alike. The companies that come out strongest will be the ones who can show their compliance is real, not just theoretical.

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