Business Law Guidance on Surprise Audits, Compliance Reviews, and Business Exposure in 2026

We all have seen business owners assume audits happen only when something is wrong. That assumption is increasingly outdated.

Across industries, regulators, insurers, lenders, and contracting partners are conducting more frequent compliance reviews. These are not always triggered by misconduct. Often, they are part of broader regulatory initiatives, underwriting recalibrations, or industry-wide risk reassessments. Many times audit rights are included in written agreements and apply to the company or organization with whom you're doing business.

As a business attorney licensed in Pennsylvania and New York, Todd Nurick of Nurick Law Group advises companies on how to prepare for and respond to these developments. Providing practical business law guidance on surprise audits and compliance exposure has become increasingly important in 2026.

Why Business Law Guidance on Surprise Audits Matters Now

Federal agencies have publicly signaled increased enforcement and compliance scrutiny in multiple areas.

The U.S. Securities and Exchange Commission has emphasized internal controls and disclosure accuracy in recent enforcement releases.See SEC Enforcement Results and Public Statements (www.sec.gov/enforcement

).

The Federal Trade Commission continues active enforcement related to data practices and unfair or deceptive business conduct.See FTC Enforcement Actions and Policy Statements (www.ftc.gov/enforcement).

At the same time, financial institutions are tightening diligence practices in response to federal banking regulatory guidance on risk management and internal controls.See Office of the Comptroller of the Currency Supervisory Guidance (www.occ.treas.gov).

Even companies that are not publicly traded or federally regulated can find themselves affected indirectly through lender inquiries, investor diligence, or contractual compliance certifications.

Where Businesses Are Most Vulnerable

Exposure tends to appear in predictable areas.

Employment documentation that is incomplete or inconsistently applied can create issues under federal and state employment laws. See U.S. Department of Labor Wage and Hour Division Guidance (www.dol.gov/agencies/whd).

Outdated data privacy practices may conflict with expanding state privacy regimes, including the California Consumer Privacy Act and similar statutes adopted in other states.See California Attorney General Privacy Enforcement Resources (oag.ca.gov/privacy).

Cybersecurity representations in vendor contracts may not align with actual practices, increasing exposure under state unfair trade practice statutes and federal consumer protection laws.

Insurance applications may contain statements that no longer reflect operational realities, creating risk under underwriting and claims review standards. See Insurance Information Institute Publications on Commercial Risk and Underwriting (www.iii.org).

Governance structures may exist informally without written documentation, creating challenges when regulators or insurers request proof of oversight. None of these issues necessarily indicate wrongdoing. They reflect growth without periodic legal reassessment.

Insurance and Financing Implications

Insurance carriers are increasingly scrutinizing internal controls at renewal and during claims investigations.

Directors and officers liability insurers frequently evaluate governance processes when underwriting coverage.See National Association of Insurance Commissioners D&O Guidance Materials (content.naic.org).

Similarly, lenders and investors are expanding operational diligence beyond financial statements. Federal banking regulators continue emphasizing enterprise risk management frameworks. See Federal Reserve Supervisory Letters on Risk Management (www.federalreserve.gov/supervisionreg).

Weak documentation can influence policy renewals, premiums, financing terms, and even access to capital.

The Expanding Role of Contractual Compliance

Larger enterprises now require vendors to certify compliance with privacy laws, cybersecurity standards, anti-corruption statutes, and operational safeguards.

Certifications tied to federal statutes such as the Computer Fraud and Abuse Act, the Foreign Corrupt Practices Act, and various state consumer protection laws are increasingly common.

Businesses that sign these certifications without confirming internal alignment assume material risk.

Practical Business Law Guidance on Audit Preparedness

Preparation does not require overengineering. It requires intention.

Businesses should consider:

• Reviewing employment and HR documentation for consistency

• Updating contract templates to reflect current regulatory standards

• Auditing data governance practices against applicable state privacy laws

• Confirming accuracy of insurance underwriting representations

• Documenting governance and decision authority structures

• Conducting periodic internal compliance reviews

These steps strengthen defensibility and reduce disruption if inquiries arise.

The Role of Outside General Counsel

Many growing companies do not maintain internal compliance departments. Outside general counsel can provide structured periodic review, identify gaps, and align policies with evolving regulatory expectations. Proper and appropriate preparation are almost always less costly than reactive defense.

Final Thoughts

Regulatory scrutiny in 2026 is not limited to large public companies. Compliance expectations are expanding across industries and company sizes. Businesses that treat compliance as an active management function are better positioned to respond confidently to inquiries. Those that do not may find themselves reconstructing systems under pressure.

Todd Nurick and Nurick Law Group provide business law guidance to companies in Pennsylvania, New York, and nationally on audit preparedness, regulatory compliance, and governance strategy.

This article is for informational purposes only and is not legal advice. Reading it does not create an attorney–client relationship. Todd Nurick and Nurick Law Group are not your attorneys unless and until there is a fully executed written fee agreement with Todd Nurick or Nurick Law Group.

Sources

U.S. Securities and Exchange Commission, Enforcement Results and Statementshttps://www.sec.gov/enforcement

Federal Trade Commission, Enforcement Actions and Policy Statementshttps://www.ftc.gov/enforcement

Office of the Comptroller of the Currency, Supervisory Guidancehttps://www.occ.treas.gov

U.S. Department of Labor, Wage and Hour Division Guidancehttps://www.dol.gov/agencies/whd

California Attorney General, Privacy Enforcement Resourceshttps://oag.ca.gov/privacy

Insurance Information Institute, Commercial Risk Publicationshttps://www.iii.org

National Association of Insurance Commissioners, D&O Guidancehttps://content.naic.org

Federal Reserve, Supervisory Letters and Risk Management Guidancehttps://www.federalreserve.gov/supervisionreg