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Governance, Risk, Audit & Privacy · Intermediate

Right to Audit Clause

Contract provision allowing a customer or regulator to audit a vendor's controls, records, and facilities.

Definition

Right-to-audit clauses define scope, notice, frequency, and cost allocation, and may allow reliance on independent reports such as SOC 2 instead of direct audits. Large cloud providers often limit direct audits, offering compliance reports instead. Regulations such as DORA and financial supervisory guidance expect audit rights for critical outsourcing.

Example

A contract permits annual onsite audits with 30 days' notice or acceptance of a current SOC 2 Type 2 report.

Exam tip

Negotiate audit rights before signing; they are difficult to add later.

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