One of the most difficult items to export from the U.S. are military armaments. The policing role that the United States plays on the global stage relies heavily on its equipment and technology being the best on the field, and this means taking all of the steps necessary to prevent it from falling into the wrong hands.

Defense contractors and other armament companies, however, may find lucrative deals abroad. Knowing when these transactions are legal, and how to comply with the law to ensure that it remains legal, is extremely important. The arms export control consultants at Corporate Investigation Consulting have walked numerous companies through this tricky situation, ensuring that they were able to make use of legal opportunities that arose while avoiding those that would have run afoul of U.S. export law.

The Two Big U.S. Export Laws Dealing With Armaments

U.S. export law has two main sets of regulations that govern the export of arms and armaments abroad:

1. The International Traffic in Arms Regulations, or ITAR
2. The Export Administration Regulations, or EAR

We delve into both of them more deeply elsewhere on our site, but a brief overview of each of them is necessary to understand the complexities inherent in arms export controls.

The International Traffic in Arms Regulations (ITAR)

We are no longer handling ITAR cases. We recommend reaching out to Oberheiden P.C.:
https://federal-lawyer.com/import-export-law/

The International Traffic in Arms Regulations (ITAR) are federal regulations derived from the Arms Export Control Act of 1976 (AECA). This Act gave the U.S. President the authority to control the import and export of defense items and services. That authority was delegated to the Directorate of Defense Trade Controls (DDTC) at the U.S. Department of State, which promulgated regulations to flesh out and enforce the AECA.

Those regulations are the ITAR (22 C.F.R. §§ 120-130).

ITAR applies to companies that make, sell, or export any of the 21 categories of “defense articles, defense services, or related technical data” listed in the U.S. Munitions List (USML) (22 C.F.R. § 121). These categories include detailed and technical lists of military equipment like:

• Firearms, close assault weapons, and combat shotguns
• Ammunition and ordnance
• Missiles
• Explosives
• Aircraft
• Personal protective equipment
• Toxic agents and chemicals

It also includes military-style services like:

• Military training
• Technical data
• Design specifications

What is contained in these listings changes frequently, making it even more difficult for companies to remain in compliance with ITAR. However, if you deal with any of the items or services listed in the USML, you will have to comply with the regulations or risk exposing your company to substantial liabilities. That compliance generally means determining which licenses the goods or services need before they can be exported legally.

The Export Administration Regulations (EAR)

The Export Administration Regulations (EAR) (15 C.F.R. §§ 730-780) are another set of federal regulations that could apply to defense contractors and other companies that want to export armaments. These regulations are implemented and enforced by the Bureau of Industry and Security (BIS) at the U.S. Department of Commerce.

The EAR apply to quasi-military items that are exported from the U.S. Those items are things that have commercial purposes but that could also be used for military purposes. They are categorized by Export Control Classification Number (ECCN) in the Commerce Control List (CCL).

The classification of the item determines where it can be exported legally. Additional legal restrictions may apply based on who the recipient would be and the purpose for which they are ordering the item.

Take the Necessary Compliance Measures for These Export Laws

Both of these laws have their own set of compliance measures that must be met. Furthermore, both of them are based on lists of arms, armaments, and other potential military items that are in constant flux. What was not illegal to export yesterday may be illegal to export tomorrow. Compliance with these regulations is not a “fix it and forget it” endeavor.

Just a few of the compliance requirements your company may need to meet are:

• Written corporate policies
• A Corporate Commitment to Compliance policy
• Employee training and retraining
• Ongoing monitoring of the lists of regulated items and sanctions lists
• Recordkeeping requirements, such as ITAR’s (22 C.F.R. § 122.5)
• Registration requirements
• Risk assessments
• Establishing procedures for reporting any export violations that do arise
• Policies that create appropriate corrective actions for violations
• Obtaining licenses whenever necessary

The compliance professionals at Corporate Investigation Consulting can walk you through these processes or help your company implement them.

Once your company has become compliant, though, more still needs to be done to ensure that it does not fall out of compliance. In addition to monitoring the regulations and sanctions lists to make sure your products have not been added to armaments lists or your business partners to the list of embargoed parties, you should also audit your company’s compliance mechanisms. This is the best way to make sure they are working as effectively as they should be, or as they were intended to work. If you do not regularly audit your arms export control protocols, you will not know if they are adequate until it is too late and their failure has already exposed your company to liability.

The Costs of Noncompliance

Willfully violating either EAR or ITAR carries massive criminal sanctions, including up to a million dollars in fines and 20 years in prison (15 C.F.R. § 764 et seq. and 22 C.F.R. § 127.3(b)). Administrative cases – generally for non-willful violations – can carry fines of either up to $300,000 per violation (adjusted for inflation) or twice the value of the transaction, whichever one is higher.

Violators are also likely to lose their export privileges, and may even get listed as a “denied person” on U.S. economic sanctions lists, which would make them unable to lawfully obtain U.S. exports, as well.

Finally, there are the publicity problems. Shipping arms or armaments to the wrong people is likely to put your company in the news for some very bad reasons. Depending on the circumstances, the blemish to your company’s brand and business reputation can be impossible to remove completely.

5 Frequently Asked Questions About Arms Export Control Law and Corporate Investigation Consulting

The Arms Export Control Consultants at Corporate Investigation Consulting

If your company manufactures, sells, or exports any military equipment, or anything that could be used for military purposes, U.S. arms export controls may apply. These regulations carry substantial compliance requirements that are highly technical, complex, and constantly evolving.

The arms export control consultants at Corporate Investigation Consulting can help you devise and implement the compliance protocols that you need in order to stay on the right side of these important laws. Contact us online or call us at (866) 352-9324.

When you export goods that could be used for military purposes in the destination country, the transaction triggers strict U.S. regulations that are meant to protect America’s national security and its interests abroad. Dual-use goods – those that could be used commercially or militarily – are subject to the Export Administration Regulations (EAR), though some purely commercial or purely military items may also fall under EAR jurisdiction.

Complying with these regulations is not easy and the costs of noncompliance are steep. The EAR compliance consultants at Corporate Investigation Consulting can walk you through the process so you can take the steps necessary to protect your company from legal liability.

What are the Export Administration Regulations and How Do They Work?

Export Administration Regulations (EAR) are a set of export guidelines and requirements. They are a fundamental aspect of U.S. import/export law and are implemented and enforced by the Bureau of Industry and Security (BIS) at the U.S. Department of Commerce.

The EAR applies to certain items that are exported from the United States.

These “items” can be:

• Commodities, like clothing, circuit boards, or machine parts
• Technology or intellectual property, like blueprints or software

These items are deemed to be “exported” if they leave the United States. This includes:

• Flying, mailing, shipping, or otherwise sending a physical good abroad
• Faxing, uploading, or downloading information to a party outside the U.S.
• Commodities or technologies that are brought outside of the country temporarily, or even if they are not for sale
• Items sent from the U.S. to a wholly-owned U.S. subsidiary in another country
• Items made in a foreign country that pass through the U.S., including items that were imported to the U.S. but are now being returned

Occasionally, the nature of the item being exported will trigger the EAR. If it does, you will need a license in order to export it. Whether the item falls under the EAR and requires a license depends on four things:

1. What the item is
2. Where it is being exported to
3. Who will receive it
4. What it will be used for

1. What the Item Is

Items are categorized under the Export Control Classification Number (ECCN) set, which is listed on the Commerce Control List (CCL).

These listings are extremely technical. Nevertheless, correctly categorizing the item your company is exporting is extremely important, as it can dictate whether you need a license to export it. If there is no adequate ECCN classification for the item you are exporting, it is designated as an EAR99 item.

2. Where It is Being Exported

Many items are only allowed to be exported without a license to certain destination countries. If this is the case with your item, you will need to cross-reference the item’s listing on the ECCN with the Commerce Country Chart. If the Chart has an X in the column specified by its ECCN listing, then either a license is needed or there has to be a license exception.

Even if there is no X in the appropriate column, you may still need a BIS license before exporting the item if the item’s end user or its likely use raise any red flags.

3. Who Will Receive It

Certain individuals and entities are not allowed to receive U.S. items, or may only receive those that have been licensed. These prohibited end users of the item can be listed by any of the following U.S. agencies:

• U.S. Department of State
• U.S. Department of the Treasury
• U.S. Department of Commerce

The International Trade Administration at the Department of Commerce has a consolidated screening list that includes the prohibited parties from all three agencies.

There are various designations that these lists use, any one of which can alter your company’s compliance obligations before exporting the item.

4. What It Will Be Used For

Finally, certain end uses are either prohibited by the EAR or require a license to complete the transaction.

Both of these issues – a suspicious end user or end use – are governed by Part 744 of the EAR.

EAR Compliance is Extremely Important

Given the complexity and the technicality of the EAR, coming into compliance with its requirements can be difficult, especially for companies that export items that could potentially be used in problematic ways or that export a lot of items every year. Those compliance protocols should include:

• Policy manuals
• A Corporate Commitment Policy
• Employee training and retraining
• Recordkeeping policies
• Ongoing risk assessments
• Auditing
• Procedures for reporting export violations
• Policies on how to take corrective actions when violations are discovered

The compliance professionals at Corporate Investigation Consulting can help company decision-makers figure out what their needs are and come up with a way to meet those needs in an efficient way.

The Penalties of Noncompliance

Failing to comply with the EAR can lead to a violation of U.S. export law. The penalties for that violation can be severe, and are laid out in 15 C.F.R. § 764 et seq. and amended by the Export Control Reform Act of 2018.

Violations can be prosecuted either as criminal offenses or as administrative violations.

Criminal penalties are up to $1 million in criminal fines as well as up to 20 years in prison for willful violations. Administrative cases carry fines in the amount of up to $300,000 per violation committed or twice the value of the transaction, whichever one is higher. This amount is adjusted for inflation, so the actual fine may be slightly higher in the future.

Additionally, violators are likely to lose their export privileges and get listed as a “denied person” on the lists of prohibited end users, preventing them from receiving exported items as well.

5 Frequently Asked Questions About EAR Law, Compliance, and Corporate Investigation Consulting

Contact Corporate Investigation Consulting Today

Complying with the EAR is not easy. There are numerous steps that must be taken to ensure that your company is complying with the law, and it can be easy to lose vigilance if exporting items is a normal occurrence for your business.

The compliance professionals, consultants, and experts at Corporate Investigation Consulting have helped numerous companies in the U.S. and abroad comply with the EAR and other important U.S. import/export laws. Contact them online or call their office at (866) 352-9324 to tap into their experience in this complex field of the law.

Corporations that import or export goods have extensive compliance obligations to meet. Worse, those obligations change frequently, requiring constant updates to company policies and daily vigilance for new changes. Making a mistake and violating U.S. or international law can be costly, both in terms of financial penalties as well as a blemish on the company’s brand and reputation.

Devising and implementing adequate import and export policies can be difficult, and the policies will be unique for each company’s needs. The import/export consultants at Corporate Investigation Consulting have extensive experience in the field. Many companies, both those based in the U.S. and those abroad, have tapped into our well of knowledge by hiring us to consult them on how to best comply with these complex legal requirements and obligations.

The Many Factors at Play in Import and Export Controls

There are so many different factors at play when it comes to import and export laws that it can truly be said that every company that does international business has unique needs to meet.

The country at the other end of the exchange makes a huge difference in the laws that can apply to the transaction. The country of origin or destination will have its own set of import/export laws and regulations that need to be followed. There will be taxes to pay and potentially even tariffs, as well. Depending on the country, there may also be U.S. sanctions to comply with and there will always be customs to go through.

The value of the goods will determine the compliance obligations that need to be met. The goods will likely be taxed by at least one country, and it is in your company’s best interests to monitor the pricing of the goods and the costs of shipping them to ensure that you are getting the best deal.

How much you are importing or exporting also matters. At the very least, you will have to accurately record the amount of your imported or exported goods to satisfy U.S. compliance responsibilities.

What goods you are exporting or importing, though, is likely the most important factor that will determine your compliance needs. The nature of the goods can trigger:

• U.S. sanctions
• Tariffs
• A host of other regulation requirements from other federal agencies

For example, if your company imports vegetables then you can count on the U.S. Food and Drug Administration (FDA) having regulations for you to follow and red tape to deal with. Companies that export weapons, meanwhile, will be subjected to extensive arms export controls.

Import/Export Law Changes Frequently

To make matters worse, import/export law changes constantly and is among the more political fields of law on the books. Predicting which way the political winds will blow, and then reacting to them when they change directions, is something that all multinational businesses will have to deal with.

U.S. sanctions law, as enforced by the Office of Foreign Assets Control (OFAC) at the Department of the Treasury, is perhaps the most egregious offender on this front. These sanctions lists can get updated multiple times per week, and companies are expected to not just avoid doing business with those on the blocked lists, but also to stop doing business with them if they already are.

Particularly for international companies that have thousands upon thousands of clients, like banks, this compliance obligation can be massive. Worse, the costs of violating sanctions are substantial.

The High Costs of Violating International Import/Export Law

With all of the legal obligations that come from importing or exporting goods and with how frequently they shift, it can be difficult to stay in compliance with them. Unfortunately, the costs of noncompliance can be severe.

While the exact penalties that a company that is out of compliance with import or export laws can face will vary on the nature and the significance of that noncompliance, the monetary fines are just the beginning. A finding of noncompliance frequently triggers a further investigation. If that investigation uncovers other issues, the legal jeopardy that the company faces will grow. Furthermore, if news of the violation gets out, the company could find its reputation harmed and its brand for good business tarnished. This can cost the company far more in lost business than the financial sanctions that were imposed.

The Services that Corporate Investigation Consulting Provides

With so much at stake, it should come as no surprise that many companies that do business abroad hire consultants to help them craft effective import/export compliance mechanisms. By tapping into experts in the field, these companies gain the insight that they need to insulate themselves from the extensive liabilities that stem from noncompliance.

The compliance professionals at Corporate Investigation Consulting provide a whole suite of services for companies looking for import/export consultants. Just a few of the most important are:

• Creating import/export policies – By standardizing how your company goes about exporting or importing goods, you can drastically reduce the odds of noncompliance
• Employee compliance training – Training and retraining employees in their compliance duties is one of the best ways to ensure that they are aware of their obligations and that they follow through on them
• Import/export policy auditing – Conducting an audit is the best way to make sure that your policies are actually being followed and that they are actually effective before they show their inadequacy by failing and exposing the company to liability
• Updating import/export policies – Whether because import/export law has changed or because an audit has found an aspect of the policy lacking, you company’s import/export protocols need constant maintenance; they are not a “fix it and forget it” process

These are just the major building blocks of a robust compliance regimen that can protect your company from the serious consequences of violating U.S. or foreign import/export laws.

Frequently Asked Questions About Corporate Investigation Consulting and Import/Export Law

Contact Corporate Investigation Consulting

If your company exports or imports goods regularly, then having strict compliance programs in place is absolutely essential if you want to avoid what could become massive consequences of noncompliance. If your company rarely does any exporting or importing, that lack of international business actually makes it even more important to get an import/export consultant on hand to make sure you are doing things correctly, or if your company’s old policies are still sufficient and adequate.

Contact Corporate Investigation Consulting online or call their office at (866) 352-9324.

Additional Import/Export Pages

• ITAR Consultants
• EAR Consulting Services
• Arms Export Control Consulting Services

Ms. Veneziano advises clients in the areas of SEC compliance, SEC and FINRA enforcement defense, IRS audits and investigations, as well as new technologies with a special emphasis on blockchain, mining, tokenization, and cryptocurrencies.

Federal Tax Investigations. Ms. Veneziano represents both individuals and companies before the IRS, including investigations initiated by the IRS and the IRS Criminal Investigation (IRS CI) as well as investigations by the FBI and DOJ working alongside the IRS. She defends her clients against allegations of tax evasion, tax fraud, falsified tax documents and falsified tax returns, and other white-collar crimes and conspiracy. Ms. Veneziano is experienced in guiding her clients through IDRs, individual tax audits, and business field audits. She works to prepare her clients for interviews before the IRS and document compilation for the IRS in response to IDRs or summons. In addition to tax defense services, Ms. Veneziano also assists her clients in developing tax compliance strategies, tax best practices for personal and business purposes, and evaluating potential liability exposure for proposed business transactions or ventures.

SEC Matters. Ms. Veneziano is an accomplished author and respected attorney in SEC and FINRA investigations, insider trading, securities fraud, and SEC corporate compliance. She has defended—with resounding success—corporate and executive clients under civil or criminal investigation against SEC subpoenas, enforcement actions, and parallel U.S. Department of Justice fraud proceedings. Among those clients are CEOs, CFOs, corporate founders, executives and board members, and multi-million and billion dollar traded companies. She defends her clients against federal allegations under the Securities Act of 1933, the Exchange Act of 1934, and the Investment Advisers Act of 1940.

Blockchain Technologies. Ms. Veneziano co-authors one of the preeminent books on blockchain, tokenization, and cryptocurrencies. She helps corporate clients, executives, programmers and developers, and individual issuers navigate this novel area of law by providing advice on applicable federal regulations and reporting obligations. Among her areas of focus in blockchain technology include structuring coin/token offerings for issuers, and analyzing whether certain digital assets are investment contracts, or “securities,” under the Howey Test, as some examples.

Tax Advice. Ms. Veneziano often uses her tax and accounting background to provide advice on tax implications for mining operations, crypto investments and subsequent dispositions, and other crypto transactions. She helps her clients determine the appropriate tax treatment of crypto-related transactions such as mining new coins, ICO income, and crypto-to-crypto or crypto-to-fiat conversions.

Compliance Review & Design. Ms. Veneziano is experienced in corporate compliance reviews, analysis, and drafting. She regularly conducts compliance and AML reviews of established companies seeking to expand their business operations as well as drafts and implements comprehensive compliance programs for executives and corporate clients.

Publications and Speaking Engagements. Ms. Veneziano’s SEC academic research appears in leading law journals including those of Harvard, Berkeley, NYU, and Georgetown. She is a regular author and contributor to legal treatises, specialized trade journals, and newsletters on securities regulation. One of her key areas of interest and publication includes the extraterritorial application of the federal securities laws and other federal provisions. She is also a lecturer on a course in U.S. securities regulation, mainly taught to compliance officers of investment advisory firms in foreign jurisdictions.

Education. Ms. Veneziano graduated from Georgetown University Law Center in Washington D.C. (Juris Doctor) and from NYU School of Law (LL.M.). At NYU, Ms. Veneziano focused on securities law and served as the Graduate Editor on NYU’s Journal of International Law and Politics. Further, Ms. Veneziano holds a Bachelor of Science in Accounting and an MBA from Western Governors University. She also passed the examinations as a Certified Public Accountant. She is currently a Ph.D. candidate at King’s College London with a focus on U.S. securities markets. Her thesis examines bond trading activity within nascent securities markets and their effect upon early corporate formation and capital growth.

Admission. Ms. Veneziano is licensed to practice law in New York.

Our Former IRS Agents & Tax Audit Attorneys Represent Individual and Corporate Taxpayers During IRS Audits

When the Internal Revenue Service (IRS) is auditing your individual or corporate tax returns, you need a representative who can communicate effectively with revenue agents on your behalf. You need a representative who understands all of the intricacies and nuances of the federal tax code—and who can use this understanding to help you or your company avoid unnecessary liability.

At Corporate Investigation Consulting, our IRS audit defense team is comprised entirely of former federal agents. This includes former Special Agents with IRS Criminal Investigation (IRS CI), the Federal Bureau of Investigation (FBI), and other federal agencies. As a result, not only do we have a comprehensive understanding of taxpayers’ federal duties, but we are also intimately familiar with the issues, oversights, and mistakes that can cause inquiries to transition from IRS audits to criminal tax fraud investigations.

Our IRS Audit Defense Services

Our former federal agents advise and represent taxpayers throughout the IRS audit process. Whether you are facing a correspondence audit, office audit, or field audit, we can help ensure that you have a clear understanding of your (or your company’s) risks, and we can help you efficiently target a favorable resolution.

We are not a law firm, and we do not provide legal representation for IRS audits. Instead, we rely on our experience on both sides of IRS audits to communicate with revenue agents on behalf of targeted taxpayers and help them make informed and strategic decisions during the audit process. In many cases, we work with taxpayers’ legal teams to help them devise and execute effective defense strategies.

Here are some examples of the services we provide for individual and corporate taxpayers during IRS audits:

Assessment of Tax Liability

Any time you are dealing with the IRS, it is important to make an independent assessment of your (or your company’s) tax liability. While most revenue agents are very good at what they do, they do make mistakes, and they are often forced to rely on incomplete information.

Our former agents will thoroughly assess your (or your company’s) tax liability in order to identify any concerns that are likely to arise during the IRS’s audit. We will review all tax returns that are subject to the audit as well as all supporting documentation. Based on this review, we will advise you of potential risks during the audit process (if any); and, if necessary, we will begin working to develop defenses to liability for back taxes, interest, and penalties. We are able to assist with all federal tax matters, including (but not limited to):

• Individual and corporate income tax liability
• Estate and gift tax liability
• Employment tax liability (including trust fund recovery penalties)
• Employee Retention Credit (ERC) claims
• Paycheck Protection Program (PPP) loan forgiveness claims
• Allegations of use of abusive tax shelters
• Allegations of fraudulent charitable contributions
• Allegations of fraudulent business deductions
• Cryptocurrency-related tax liability
• Offshore bank account and foreign financial asset reporting

All of these present potential areas of concern for taxpayers, and the IRS has shown a willingness to aggressively enforce taxpayers’ reporting and payment obligations in recent years. As a result, an informed defense strategy is critical, and this starts with knowing what (if anything) revenue agents are likely to uncover.

Correspondence with Revenue Agents

Throughout the IRS audit process, we can communicate with revenue agents on your behalf. We are well-versed in the IRS’s audit procedures, and we have a pretty good idea of what is coming and when. In many cases, we are able to address potential concerns proactively—streamlining the audit process, reducing revenue agents’ workloads, and facilitating efficient and favorable outcomes for our clients.

Communicating with revenue agents is where many taxpayers (and taxpayers’ representatives) get themselves into trouble. While they think they are saying the right thing, in reality they are raising more questions than they are resolving. As a result, their audits grow in scope, and their risk increases significantly.

We rely on our experience to communicate effectively with revenue agents during our clients’ audits. We know what to say, what not to say, and what to expect in response from the IRS. Effective communication is critical, and we rely on our extensive experience to strategically and professionally represent our clients through all stages of the audit process.

Identification of Applicable Credits, Exemptions, and Exclusions

While IRS audits generally focus on uncovering underreporting and underpayments, in many cases targeted taxpayers will have failed to claim available credits, exemptions, and exclusions as well. In addition to defending against additional tax liability, we also leverage any available opportunities to reduce our clients’ tax burdens. It is not unusual for an IRS audit to result in a refund to the taxpayer; and, when necessary, we work with the IRS to offset our clients’ underreported tax liability against their unclaimed credits and deductions.

Identification of Flaws and Overreaching During the Audit Process

When we represent clients during IRS audits, we scrutinize the auditing agents’ activities to identify flaws that require correction and ensure that they do not overreach when requesting records or information from our clients. Taxpayers are not necessarily required to provide all of the information revenue agents request, and failing to appropriately deny requests can expand the scope of an audit unnecessarily. We routinely work with revenue agents to correct flawed assumptions, flawed calculations, and incorrect applications of the federal tax code, and we step in to protect our clients from overreaching when necessary.

Assistance with Resolving Federal Tax Controversies

When our clients are at risk of liability for back taxes, interest, and penalties, we use our experience to help them favorably resolve their tax controversies with the IRS. We negotiate tax settlements and offers in compromise, prevent audits from triggering tax fraud investigations, and protect our clients through a variety of other means. Regardless of the circumstances at hand, a proactive approach will afford the greatest opportunity to achieve a favorable result; so, if you or your company is facing an IRS audit, we encourage you to speak with one of our former agents as soon as possible.

FAQs: Defending Against an IRS Audit

Contact Us for More Information About Our IRS Audit Defense Representation

If you would like to know more about how we help individual and corporate taxpayers during IRS audits, we invite you to get in touch. To speak with a former federal agent at Corporate Investigation Consulting in confidence, please call 866-352-9324 or request a complimentary consultation online today.

Our Consultants Advise Healthcare Entities Before, During, and After HRSA Audits

The U.S. Health Resources & Services Administration (HRSA) audits healthcare providers and other organizations for compliance with the terms of their federal grants. Under the HRSA’s regulations, most grant recipients must submit audit reports annually, and these audit reports are subject to review by the HRSA’s internal personnel. When a grant recipient’s audit report exposes billing violations or raises red flags for fraud, this can trigger scrutiny from the HRSA—and potentially from other federal authorities as well.

As a result, grant recipients must take the HRSA audit process very seriously. They must work with experienced consultants to ensure that their audit reports meet all regulatory requirements, and they must also work with their consultants to proactively address any areas of concern. In the event that the HRSA initiates its audit resolution process or initiates its own audit or investigation, grant recipients must rely on their consultants (and potentially outside counsel) to help them avoid unnecessary consequences.

Experienced Healthcare Fraud Defense Consultants for HRSA Audits Nationwide

We assist healthcare providers and other organizations with HRSA audits nationwide. Our consultants assist organizations throughout the process—from ensuring that their audit reports will withstand HRSA scrutiny to assisting with defense against HRSA (and other agency) audits and investigations. With deep experience in the federal healthcare arena, including prior experience as healthcare fraud investigators, our consultants are well-versed in all areas of HRSA auditing and grant compliance.

How We Help Healthcare Providers and Other Organizations with HRSA Audits

Our consultants assist healthcare entities before, during, and after HRSA audits. We routinely guide healthcare providers and other organizations through matters including;

1. Complying with the HRSA’s Audit Requirements for Grant Recipients

Submitting a compliant annual audit report (whether a Single Audit report or a financial audit report prepared according to the Government Auditing Standards) is critical for avoiding unwanted scrutiny from the HRSA. We work with our clients and their auditors to ensure that their audit reports meet all pertinent regulatory requirements. As even technical issues and oversights can raise red flags at the HRSA, it is imperative that grant recipients (and their auditors) put in the time and effort to ensure that they are comprehensively addressing all pertinent reporting and disclosure obligations.

In some cases, grant recipients’ annual audits will uncover billing violations and other deficiencies. When this happens, a proactive approach is critical. Before submitting their audit reports to the HRSA, grant recipients that have uncovered violations must take steps to demonstrate that both (i) the past violations have been thoroughly addressed, and (ii) they have taken adequate steps to prevent similar violations in the future. We assist our clients with these processes as well, and we have an extensive track record of helping healthcare providers avoid unnecessary consequences through a proactive, cautious, and strategic approach to disclosure and compliance.

2. Defending Providers and Other Organizations During the HRSA Audit Resolution Process

When the HRSA identifies red flags in a grant recipient’s Single Audit or financial audit report, it investigates its concerns through the audit resolution process. This process presents substantial risks for grant recipients, as findings that a recipient has improperly billed the HRSA can lead to:

• Drawdown restrictions
• Withholding of a percentage of the grant recipient’s federal funds
• Suspension of access to federal funds
• Reimbursement liability for drawdowns
• Termination of the recipient’s federal grant

During the audit review process, HRSA inspectors look for violations in three broad categories. Depending on their scope, severity, and cause, violations in each of these categories have the potential to lead to the consequences listed above:

• Management Findings – Management findings are those that either signify “[s]ignificant deficiencies in internal controls” or “[m]aterial noncompliance with laws, regulations, contracts, or grant agreements.” Managing findings often lead to systemic compliance failures; and, as a result, they will frequently expose healthcare providers and other organizations to significant penalties.
• Monetary Findings – Monetary findings are those that raise questions about the costs that a grant recipient has billed to the HRSA. This includes “[k]nown questioned costs cited in the audit report” as well as issues that the HRSA’s inspectors uncover during the audit resolution process.
• Repeat Findings – Repeat findings are those “that were identified in a previous Single Audit for which corrective actions have not yet been completed as planned.” The HRSA expects grant recipients to promptly correct all past compliance failures, and failure to do so can lead to adverse consequences.

We assist healthcare providers and other organizations with all aspects of HRSA audit resolutions. This includes dealing with the HRSA on behalf of our clients as well as working with our clients to proactively address apparent compliance failures. Here, too, a proactive and strategic approach is key, and we rely on our experience both as consultants and as former federal healthcare fraud investigators to advise our clients effectively.

3. Defending Providers and Other Organizations Facing Civil or Criminal Enforcement Action

Federal healthcare fraud is a major issue, and it is currently one of the federal government’s top law enforcement priorities. As a result, when an HRSA audit uncovers evidence of fraud, this can trigger immediate, intensive, and high-risk federal scrutiny.

In addition to assisting providers and other organizations during the HRSA audit process, we also consult with clients and their counsel during ensuring civil and criminal enforcement actions. This includes enforcement actions conducted by the U.S. Department of Health and Human Services’ Office of Inspector General (DHHS OIG), U.S. Department of Justice (DOJ), and other federal agencies. The HRSA inspectors share audit information with these agencies when they have concerns about civil or criminal fraud, and these agencies have substantial authority to gather additional information through document requests, civil investigative demands (CIDs), subpoenas, and other means.

While healthcare providers and other organizations can face grant-related penalties during the HRSA’s audit resolution process, the consequences of a healthcare fraud audit or investigation can be far greater. In civil enforcement actions, grant recipients can face civil monetary penalties (CMP), treble damages, and other costs in addition to the penalties listed above. In criminal enforcement actions, grant recipients can face substantial fines at the organizational level, and owners and executives can face both fines and prison time in some cases.

FAQs: Avoiding Unnecessary Consequences During an HRSA Audit

Speak with an HRSA Audit Consultant at Corporate Investigation Consulting

If you need to know more about how to deal with the HRSA’s audit process, we encourage you to contact us promptly. To arrange a complimentary initial consultation as soon as possible, call 866-352-9324 or contact us confidentially online today.

Are Your Company’s (or Your Personal) Assets at Risk? Our Investigators Can Let You Know

When it comes to protecting a company’s or high-net-worth individual’s assets, implementing an asset protection strategy is just one step in the process. You also need to know if your strategy is working; and, when faced with a liability risk or theft, you need to get to the bottom of the situation as quickly as possible.

Taking these steps to protect your company’s (or your personal) assets requires the skills and insights of an experienced asset protection investigator. At Corporate Investigation Consulting, our former federal agents rely on extensive relevant experience to help companies and individuals protect their assets through targeted and comprehensive investigations. Whether you need to better understand your company’s vulnerabilities, need to know if your personal assets are secure, or need to conduct an investigation in connection with potential or pending litigation, our former federal agents can get to work immediately.

Our Services

We offer asset protection investigation services for both companies and individuals. Like all of our services, we custom-tailor these investigative services to our clients’ specific needs, ensuring that we provide our clients with all of the information and insights they need without wasting time (or money) in areas that don’t matter to you or your business.

Corporate Asset Protection Investigations

We work with companies to help protect their assets on both an ongoing and an ad hoc basis. Whether you are looking to build a relationship with an asset protection investigation firm to help manage your company’s risks on an ongoing basis, or you need to engage an asset protection investigator for a discrete concern or event, we can cost-effectively fill the role. Our asset protection investigation services for companies include:

• Proactive Asset Protection Investigations – With asset protection, the best defense is a good offense. If you know that your company’s asset protection strategy is working as it should, this can help you sleep at night, help you speak confidently with your shareholders, and help ensure that claims and litigation do not lead to unnecessary losses. We conduct proactive asset protection investigations focused on evaluating our corporate clients’ asset protection strategies and determining which of their assets are within reach for commercial and judgment creditors.
• Litigation-Related Asset Protection Investigations – If your company is facing the threat of litigation (or if a lawsuit against your company is already pending), you need to know the stakes involved. Our asset protection investigators can gather the information you need, and our consultants can use this information to help you make the right decision about how to move forward.
• Theft–Related Asset Protection Investigations – Corporate theft is a major threat to companies’ assets as well—and it is the biggest risk that many companies face. If your company is dealing with internal or external theft, whether online or in its physical facilities, we can investigate to identify the party (or parties) involved and help you determine appropriate next steps for both holding the perpetrator (or perpetrators) accountable and preventing similar losses in the future. 

Individual Asset Protection Investigations

We provide similar asset protection investigation services for individuals. If you need to know whether your assets are truly out of sight and out of reach, need to know which of your assets are at risk in litigation, or need to find out who stole your personal property (whether physical or digital), we can help. As former high-ranking federal agents, we have the capabilities you need, and we have the resources required to conduct asset protection investigations across the U.S. and around the globe.

If you have assets that you don’t want to lose, you cannot afford to wait until something goes wrong to find out if your asset protection strategy is working. Once you contact us, we can get to work immediately, and we will keep you informed in real time as we uncover the information you need to know.

What to Expect from Our Asset Protection Investigators

When you need to conduct an asset protection investigation, it is important to know what you can expect from the firm you engage to conduct the investigation on your (or your company’s) behalf. Here is what you can expect when you choose Corporate Investigation Consulting:

1. You Will Work Directly with Our Former High-Ranking Federal Agents

Our asset protection investigation team consists exclusively of former high-ranking federal agents. You will work directly with these former DOJ, FBI, and IRS special agents throughout the investigative process.

2. We Will Work Quickly to Help Protect Your Company’s (or Your Personal) Assets

When you need to conduct an asset protection investigation, you don’t have time to waste. We will work quickly to help protect your company’s (or your personal) assets, and we will rely on our extensive investigative experience to ensure that we do not leave any stone unturned.

3. We Will Provide the Information You Need to Make Smart Decisions About Your Next Steps

Based on the information we uncover during the investigative process, we will help you make smart decisions about your next steps. We will ensure that you are aware of all vulnerabilities, litigation risks, and additional asset protection opportunities so that you can move forward with confidence.

Related Services We Offer

Along with our asset protection investigation services, we offer several related services as well. Many of our clients that engage us for asset protection investigations also engage us for:

• Compliance Management and Stress Testing – We provide comprehensive compliance management services for companies in all industries. Effective compliance management is a key corporate asset protection strategy. We also conduct compliance program stress testing focused on ensuring that our clients’ compliance programs are functioning as intended.
• Digital Forensics – Digital forensics are playing an increasingly greater role in all types of investigations. If necessary, we can utilize our digital forensics capabilities in connection with your (or your company’s) asset protection investigation.
• Internal Audits and Investigations – For our corporate clients, we also offer internal audit and investigation services. If your company is facing a liability risk due to a compliance failure or dealing with internal theft, we can gather the intelligence your company needs to determine—and document—appropriate disciplinary measures.

FAQs: Asset Protection Investigations

Speak with an Asset Protection Investigator at Corporate Investigation Consulting

If you would like to know more about our asset protection investigation services, we invite you to get in touch. To speak with a senior asset protection investigator at Corporate Investigation Consulting, please call 866-352-9324 or inquire online today.

Employers and small businesses rely heavily on their employees to make things happen. One thing that state laws require companies to do in return is to carry workers’ compensation insurance to cover workplace injuries. Coming into compliance with those state laws and maintaining that compliance is essential for several reasons: Not only does it protect the company’s workers, but it insulates the company from personal injury lawsuits and potentially other law enforcement actions.

The corporate compliance consultants at Corporate Investigation Consulting have helped companies across the country avoid these negative outcomes by reaching and maintaining a strict compliance protocol for their state’s workers’ compensation system.

Workers’ Compensation Laws Vary By State

Importantly, workers’ compensation laws are state laws – there is no overarching federal counterpart to make things uniform. While states tend to follow general patterns and require similar things of employers, the details can vary widely between one state and another. As a result, the answers to the following seemingly basic questions can be different depending on where your company is located:

• How much are injured workers entitled to receive?
• What happens if the injury was caused by a coworker?
• How do I process a workers’ compensation claim?
• What actions can I take against a worker for misconduct that happened after he or she filed for workers’ comp?
• Was the injury claim timely filed?
• Do I even need to carry workers’ compensation insurance?

This can create lots of confusion for company owners and other stakeholders and decision makers. That confusion can quickly lead to oversights and mistakes that expose the company to costly litigation and a bad reputation for not protecting its workers.

Hiring experienced consultants who understand the law in your state is essential if you want to avoid these bad outcomes for your company.

The Consequences of Noncompliance with Workers’ Compensation Laws Can Be Severe

Failing to comply with your state’s workers’ compensation laws and requirements can lead to serious consequences that come from three different sides:

1. The injured worker can sue your company for the accident
2. Other workers and the public can view your company negatively for not providing for your employees
3. State regulators can take legal action against your company

While the details vary between states, each consequence is worth delving into.

1. Your Company Can Get Sued

First and foremost, a company’s failure to provide workers’ compensation coverage to its employees can expose the company to personal injury lawsuits for workplace accidents.

Workers’ compensation is essentially a trade-off for companies and their workers. On the one hand, hurt employees are compensated quickly and with little effort on their part, without needing to show who was at fault for their injuries. On the other hand, those same employees agree to make use of the workers’ compensation system as the sole and exclusive remedy for their workplace injuries. They also agree to forgo some important types of financial compensation for their losses, such as for their pain and suffering.

Companies that do not carry workers’ comp insurance do not benefit from the protections provided by that exclusive remedy. Their workers can file personal injury claims against the corporation for the company’s alleged negligence in causing their injuries. Those lawsuits can recover the full range of financial compensation available to typical plaintiffs, including for their pain and suffering and other noneconomic damages.

2. Your Company’s Reputation Can Suffer

Particularly if the workplace accident was a severe or a fatal one, it is not unlikely that the incident will make it into the local or regional news. If the victim’s employer did not carry workers’ compensation insurance, they and their family will be deprived of what the public considers to be a dependable source of compensation for workplace injuries.

The negative impact that this can have on a company – particularly a small business that relies heavily on its good reputation to attract new clients and projects – can be crippling. In many cases, the costs of that lost business far surpasses what the business would have lost, had it maintained its workers’ compensation premiums and coverage.

3. Regulators Can Take Legal Action Against Your Company

Finally, some states enforce their workers’ compensation laws more vigorously than others. In those states, companies that do not uphold their legal obligations in carrying workers’ compensation insurance when necessary can face fines and other monetary penalties for their noncompliance.

A Basic Workers’ Compensation Compliance Checklist

While every workers’ compensation compliance strategy will be unique and will depend on the state’s laws and regulations as well as on the particular needs of the company, there are some steps in workers’ compensation compliance that are fairly universal. Here are eight of these typical components.

1. Figure Out If Your Company Needs to Carry Workers’ Compensation Insurance

Many small businesses are not legally required to carry workers’ comp. Even those that do not, however, may still choose to do so in order to better protect their employees and their company’s reputation.

2. Determine Compliance Obligations

If workers’ compensation coverage is required, the next step is to ensure exactly what that entails. Different states have different requirements, and often distinguish between different types of businesses and industries. Construction companies, for example, frequently have more onerous compliance obligations because of the inherent risks of their worksites.

3. Find the Best Insurance Provider to Meet Your Company’s Needs

There are a lot of workers’ compensation insurance providers out there. Their reputations vary, from companies that aim to protect your workers to those that will stop at nothing to protect their bottom line.

4. Post the Required Notices for Workers

State regulations generally require employers to post information about their workers’ compensation coverage in a prominent place for employees to see. Most employers satisfy this with a posting in a rest area or break room, though if your company does not have one of these places, you may need to get creative to comply with this requirement.

5. Create and Maintain a Reliable Injury Reporting and Claims Process

Workers should know who to report their injuries to, and should rest assured that their report will not be ignored or frowned upon. It should also be easy for workers’ to fill out the claims forms.

6. Promote a Safe Workplace

Companies that want to reduce the costs of their workers’ compensation premiums should take all the steps necessary to prevent workplace accidents. This includes promoting safety in the workplace and fixing any potential dangers on the worksite.

7. Recordkeeping

Workers’ compensation regulations require companies to keep records of incidents and injuries that happen at work. This allows regulators to spot dangerous workplaces and single them out for more extensive inspections. Failing to uphold this recordkeeping obligation can expose your company to penalties.

8. Review Coverage Needs Regularly

Companies should regularly review their workers’ compensation coverage needs to ensure they are still in compliance with the law without paying more than what is necessary.

Frequently Asked Questions About Corporate Investigation Consulting and Workers’ Compensation Compliance

Workers’ Compensation Compliance Consultants at Corporate Investigation Consulting

Business owners and executives should think twice about making big decisions on their workers’ compensation plans without experienced help, particularly if they do not have in-house legal counsel.

The workers’ compensation compliance consultants at Corporate Investigation Consulting are experts at all things compliance. Our investigators and corporate professionals know what is necessary under the law and how that applies to your company.

Contact us online or call our offices at (866) 352-9324 for experienced help that can save your company thousands of dollars in the long run.

Former Federal Agents Offering Medicare RAC Audit Defense Nationwide

For healthcare providers that rely on Medicare reimbursements to run their businesses and pay their employees, few events are more nerve-racking than receiving notice of a RAC audit in the mail. Recovery audit contractors (RACs) are private companies that work with the Centers for Medicare and Medicaid Services (CMS) to scrutinize Medicare-participating providers’ billing practices, pursue recoupments, and impose other penalties when warranted.

Even if your practice is fully Medicare-compliant, facing a RAC audit can still present significant risks. There are a couple of reasons why. First, RACs are financially incentivized to “uncover” overpayments from Medicare. Simply put, the more they recover for CMS, the more they get paid. Second, while RAC auditors are supposed to be experts in Medicare billing compliance, mistakes during RAC audits are common, and these mistakes can lead to substantial unjustified liability.

We Provide RAC Audit Defense Services for All Medicare-Participating Healthcare Providers

We represent Medicare-participating providers nationwide during RAC audits. In doing so, we rely on extensive experience as former federal agents who previously oversaw Medicare fraud investigations and assisted with the prosecution of other types of healthcare fraud cases. As a result of this experience, we are intimately familiar with the Medicare billing rules and regulations, and this allows us to both independently evaluate our clients’ Medicare compliance efforts and deal with RAC auditors effectively on our clients’ behalf.

Our Medicare RAC audit defense practice is nationwide in scope. As a result, we represent physician practices, clinics, hospitals, laboratories, pharmacies, and other clients during audits conducted by all five of CMS’s recovery audit contractors. As of March 2023, the RACs are:

• Performant Recovery Inc. – Performant Recovery Inc. is the RAC auditor for CMS Regions 1 and 2. It is also the RAC auditor for durable medical equipment (DME) and home health/hospice companies nationwide (Region 5). CMS Regions 1 and 2 cover most of the northeastern and central United States.
• Cotiviti, LLC – Cotiviti, LLC is the RAC auditor for CMS Region 3, which encompasses the southeastern United States.
• Cotiviti GOV Services – Cotiviti GOV Services is the RAC auditor for CMS Region 4, which covers the western United States as well as Alaska and Hawaii.

As CMS explains, “RACs review claims on a post-payment basis. The RACs detect and correct past improper payments so that CMS and [other authorities] can implement actions that will prevent future improper payments.” While RACs are supposed to identify both overpayments and underpayments, as a practical matter Medicare audits almost always focus on identifying provider mistakes that justify demands for recoupment. At Corporate Investigation Consulting, we have a proven track record of helping providers avoid unnecessary liability during RAC audits, and we work with RAC auditors on behalf of our clients to help ensure that our clients do not face recoupments (or other risks) unnecessarily.

Understanding the Scope (and Risks) of a RAC Audit

When auditing Medicare-participating providers’ billing histories, RACs have substantial authority to examine providers’ records for numerous potential violations. While RACs are only authorized to examine the “Approved RAC Topics” designated by CMS, there are currently more than 175 approved topics—and many of them are extremely broad.

As a result, when facing a RAC audit, one of the first challenges providers face is simply determining where their risks lie—and what the RAC’s auditors are (and aren’t) authorized to review. This is where having in-depth knowledge of the Medicare rules and regulations comes into play, and it is one of the first areas in which we are able to add significant value for our healthcare clients.

By getting involved in our clients’ RAC audits early, we are able to help ensure that auditors only review the records they are authorized to review. We are also able to step in and address any other issues with the auditors’ methods and practices. Ensuring that the scope of the audit remains appropriately limited reduces both the costs and risks involved, and challenging inappropriate auditing methods and practices ensures that our clients are not penalized unfairly.

How We Help Our Clients Avoid Unnecessary Recoupments (and Other Consequences) During Medicare RAC Audits

When engaged to provide Medicare RAC audit defense services, these are just some of the ways we help protect our clients. When you choose Corporate Investigation Consulting to oversee your healthcare practice or business’s RAC audit, our former federal agents will also:

1. Conduct a Comprehensive Internal Medicare Billing Compliance Assessment

Before the RAC conducts its audit, our former federal agents will conduct a comprehensive internal Medicare billing compliance audit focused on the Approved RAC Topics. This way, we will know what (if anything) the RAC’s auditors are going to find.

If your healthcare practice or business’s Medicare billings are fully compliant, we can use the documentation we collect and generate during our internal assessment to demonstrate compliance and steer the audit toward an efficient result. If there are issues that need to be addressed, knowing what these issues are will allow us to address them in the most effective way possible.

2. Intervene and Take Control of the Audit Process

If a healthcare provider or business is not careful, its RAC audit can quickly get out of hand. Our former federal agents intervene and take control of the audit process to ensure that this does not happen. We will deal with the RAC’s auditors directly, oversee their efforts to ensure that they do not overreach, and immediately step in to address any other efforts to use unfair methods or practices.

3. Challenge Flawed Assumptions and Conclusions

As we mentioned above, RAC auditors make mistakes. If left unaddressed, these mistakes can lead to unjustified recoupment demands and other penalties. In addition to stepping in to address auditors’ use of unfair methods and practices, we also step in to challenge flawed assumptions and conclusions, and we work hard to ensure that our clients are not left in the position of needing to file an appeal.

4. Work to Proactively Resolve Any Medicare Billing Compliance Issues

If our clients have Medicare billing compliance issues that they need to address, we work to help our clients address these issues proactively—before they lead to unnecessary consequences. While many healthcare providers and business owners assume that a “wait and see” approach will be the most cost-effective, this generally is not the case, as allowing a RAC to “uncover” a compliance failure is far more likely to lead to serious consequences.

5. Implement Compliance Improvements and Identify Next Steps

Along with providing Medicare RAC audit defense services, we also provide comprehensive healthcare billing compliance services to all types of healthcare providers and other Medicare-participating businesses (i.e., DMEs). If necessary, we can help you implement compliance improvements to avoid unnecessary consequences during future RAC audits. We can also provide guidance on next steps for matters such as appealing the outcome of a RAC audit, and we can assist with preparing for a follow-on healthcare fraud investigation as well.

FAQs: Avoiding Recoupments During a Medicare RAC Audit

Speak with a Former Federal Agent About Your Medicare RAC Audit

Are you preparing to go through a RAC audit? If so, we encourage you to contact us for more information. To speak with a former federal agent in our Medicare RAC audit defense group in confidence, call 866-352-9324 or inquire online today.

A Quality Assurance Review (QAR) is an audit of your corporation’s internal auditing process.

While this may sound like a step too far in the internal auditing process, it is such a highly-recommended aspect of the corporate compliance scheme that the Institute of Internal Auditors requires them to be performed regularly. Without a QAR, corporations cannot take the results of their internal auditing team without question. Those results may be the result of bias, a flawed auditing system, or a systemic failure to hold up to the best practices in the auditing industry. Without a QAR, corporations cannot rule these possibilities out, and cannot rest assured that they are making decisions based on reliable information.

The auditing professionals at Corporate Investigation Consulting have performed countless Quality Assurance Reviews for companies across the United States, both large and small. Our auditors have uncovered serious issues with internal auditing protocols in numerous companies, exposing risks of legal liabilities and business inefficiencies that had been covered up by flawed auditing procedures that had failed to find the problem. This has helped decision makers take the right moves to protect their companies from lost revenue streams and allegations of misconduct that could lead to legal liability.

Quality Assurance Reviews Audit the Auditors

Internal audits look at the inner workings of a corporation to find inefficiencies that are losing the company revenue or potential legal liabilities that could cost the business money or hurt its reputation and brand. Internal audits are an essential part of doing business, though many company stakeholders may not want them to be. Expanding a business and making it grow are often the focus of corporate decision makers. Reviewing what the business does to insulate it from threats and make it perform better is far less interesting.

However, the value of any internal audit is limited by an important factor: The quality of the audit, itself. Internal audits can be done well or can be done poorly. If they are done poorly, the results can create a false sense of security.

Unfortunately, it can be nearly impossible for inexperienced eyes to tell the difference between a good and a bad audit. Most of the problems that can undermine the reliability of an audit are made behind the scenes. They are also generally the result of negligence or outdated auditing techniques, rather than any intentional conduct. As a result, the internal audit’s findings may appear to be legitimate and reliable enough for the company to act on them, without any indication or inkling that this is not the case. This can put the corporation in a bad position, as the thought process that led to an important decision would have been based on inaccurate information.

By conducting a quality assurance review, or QAR, companies can ensure that their internal audits are producing results and findings that are, in fact, reliable enough to use as the basis for future decisions.

Two Types of QARs

Generally speaking, there are two types of QARs that a corporation can conduct on its internal auditing team:

1. Full external assessments
2. Internal assessments with external validation

Each has benefits and drawbacks. Both require input from outside the company.

Fully External QARs

A fully external QAR is an audit of the corporation’s auditing protocols that is done entirely independently of the company. To conduct a fully external QAR, a corporation would hire an auditing company that is completely independent from the corporation. That auditing company would then review the internal auditing system that the corporation uses for its internal audits.

The benefits of a fully external QAR are obvious: A completely new and independent set of eyes on the corporation’s auditing process. There is no concern about bias or conflicts of interest affecting the results of the QAR and hiding any shortcomings of the corporation’s auditing team.

Fully external QARs, though, are generally more expensive. The external auditing agency is tasked with the entire QAR, which needs to be thorough and can take a long time to complete.

Internal QARs with External Validation

QARs can also be done by the corporation’s internal auditing team, so long as there is independent, external validation of the QAR to ensure that it was effective and did not just cover up the auditing team’s shortfalls.

Internal QARs are less expensive than completely external ones, as the internal auditing team does much of the legwork. However, these self-assessments can also be less reliable: The external, independent auditor will not have directly conducted the assessment, putting them in a position where it can be difficult to gauge the reliability of the process.

The Subtle But Understated Benefits of a QAR

By reviewing a corporation’s internal auditing procedures, companies can ensure that they are getting the right facts about their exposures to legal liability and the efficiency of their business practices.

The value of this is difficult to understate.

Companies that conduct internal audits rely heavily on the outcomes of the audit. If there was any indication that those results could not be trusted, it would completely undermine the point of the process.

QARs answer that question. They investigate how internal audits are done at the corporation – both in theory and in practice – and give corporations a better idea of the reliability of the results that those audits produce for the company.

The benefits of a QAR are easier to appreciate by looking at what would happen in their absence. Companies that never conduct a QAR end up using data to make important corporate decisions that was produced by internal auditors who may or may not be counted upon to provide accurate information. If that is the case, what is the point of running an internal audit?

Regular QARs are Required by Auditing Standards

The value of a QAR is so significant that the International Standards for the Professional Practices of Internal Auditing, published by the Institute of Internal Auditors, requires them. Standard 1312 states that these external assessments must be conducted by qualified and independent assessors from outside the organization at least once every five years.

Frequently Asked Questions About Quality Assurance Reviews and Corporate Investigation Consulting

QAR Audits By Corporate Investigation Consulting

Conducting a QAR pays substantial dividends, particularly over the long run. They allow corporations to make decisions based on evidence and data discovered by internal audits that they know they can rely on. This helps stakeholders and corporate officers make informed decisions based on reliable data, rather than on false assurances and a misplaced sense of security and confidence.

The consulting professionals at Corporate Investigation Consulting can help.

Whether you need skilled, talented, and experienced auditing professionals to conduct a fully independent assessment of your corporation’s internal auditing protocols or to review an internal QAR and provide external validation for its findings and processes, Corporate Investigation Consulting is among the most trusted names in the business.

Call our offices at (866) 352-9324 or contact us online.