Four Tips for Avoiding a Software Audit

A software audit has the same ominous ring to it that a tax audit does. If not handled properly, both may be quite costly.

An audit request will come your way if your company purchases software licences. Microsoft is the company with the most frequent requests. Oracle, Adobe, IBM, and SAP are just a few examples of large technology companies.

This week, I’d want to talk about some techniques for avoiding a software audit that you can use. Even if you do not participate in audits, you will still receive inquiries. The following suggestions, on the other hand, will assist you in navigating the difficult auditing playing field. To put it another way, you should be in a better position to resist an audit. It is much better if you can avoid one altogether.

Reduce Complexity

Complicated licencing procedures lead to uncertainty among applicants, which plays straight into the hands of auditors. You may honestly feel that your organisation is operating within the confines of the law. The auditors, on the other hand, know where to look. They are well-versed in identifying ambiguity in language and contracts that you would otherwise ignore.

Incredibly complicated software contracts are created by the software firms themselves, and they are extremely difficult to understand. As a result, even if you are meticulous in your assessment of every contract you sign, there may be misunderstanding in how you distribute those licences throughout your organisation.

Recent work included collaborating with a firm that was in the process of migrating a number of its services to the cloud. One of the reasons for doing so was to lessen the amount of complexity in their licence agreements, which they had become increasingly complex.

However, because they were working in a hybrid cloud and on-premise setting, they discovered that the situation was considerably more complicated. When it comes to creating services in the cloud, it is so simple that many workers don’t think about the licencing implications until it is too late. It is this same dynamic element of the cloud that makes it so alluring, but it may also present tracking challenges owing to the ease with which a computer can be brought online by anyone.

Relocating solutions to the cloud can minimize intricacy. It is still early where combined atmospheres are the norm. Don’t think your cloud suppliers recognize the details of your licensing deals. Understand that if you attempt to move on-premise software to a cloud setting, you’re likely to have licensing issues. It is best to resolve those sooner than later with your vendor.

Perform Regular Internal Audits

When it comes to internal auditing, many organisations will surely wait until they have received a request for a software audit before starting. Please do not fall victim to this technique. Making internal audits a priority can assist you in identifying licence deviations before they become costly concerns. It has come to my attention that when a firm is expanding at a rapid rate and also expanding its geographical reach, some of the most visible licencing issues occur.

It is much too simple to assume that you will ultimately be able to ensure that all of your new recruits are utilising software that is compliant with the regulations and standards. Auditors are well aware of this weak spot. When they track it down, you should expect them to cost you for prior non-compliance, which will be billed to you retrospectively.

An internal audit should be carried out at least yearly. Vendors who offer to assist you in resolving your compliance difficulties are to be avoided. There are many who are sincere, but there are others who see it as a chance for a covert audit. It is preferable to do the audit on your own, with the help of your own employees. Almost all of the main software developers provide solutions to assist you in conducting internal audits.

Most people are honest about how their tools function and how frequently they contact their loved ones. Ask the vendor about how they access and share data before deploying any monitoring equipment. The idea here is to anticipate problems before they are brought to the attention of suppliers. Work with the seller to fix any issues you identify.

Educate Your Employees

Too many compliance issues stem from the fact that employees use the software in ways that are outside the licensing contract. I have seen this happen inside companies that rely heavily on virtualisation. Some employees do not understand the complexities around virtualisation and assume a temporary host/server can be deployed without breaking the contract. Virtualization is so mainstream today that you can solve the problem by educating your employees on basic software compliance models.

Make education part of the onboarding process for new employees, so they understand the seriousness of the start. However, don’t stop with new employees. Ongoing awareness campaigns can help you get the word out and bubble up any concerns employees have about their own tools and devices. You must be vigilant when it comes to communicating the importance of software compliance to the entire company.

You should also have a process in place whereby employees can request software tools they need to do their jobs. Ignoring their requests will not make the problem disappear. You are far better off having a vetting process in place to ensure new software requests match business objectives. That allows you to work with the employee to determine the best option while remaining in compliance.

Plan Accordingly for a Software Audit

You may have all your licences in order, but if you buy enough software, you will face an audit. It is better to plan for an audit than to pray for none. Most businesses expect to be audited eventually. Your organisation should establish who is responsible for managing audits. It’s important to have a single point of contact, especially in large firms with several software buyers. An audit team is usually formed with one person as the lead.

The audit team should be ready to respond. This is usually 60 days, although it can be changed. Some vendors may agree to no audits for the first several years. The audit team should know the contracts and be able to advise and question internally and outside. Putting together an IT, asset management, and legal team is a smart start. The team does not have to be enormous, but it must be well-informed and ready to respond.


Like a root canal, a software audit is generally not your cup of tea. Audits are tedious, difficult, and costly. But they don’t have to be if you’re prepared and follow some simple standards. The main issue I find is that organisations do not act until they receive an audit notification. Maybe you can persuade the auditor to put it off a few months.

Your lack of forethought will ultimately catch up to you. Accounting audits are becoming increasingly common as software businesses migrate to the cloud. Some auditors consider themselves as sales reps. That is the current environment.

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