This clause allows your external auditors (accountants who verify your financial records) to see confidential information as part of their audit work. It matters because auditors need access to sensitive information to do their job properly, and if they cannot see the confidential data, the audit becomes meaningless and potentially misleading. For example, an auditor reviewing a company's financial statements may need to see contracts with confidential pricing terms to verify the numbers are correct. This clause protects you because auditors are bound by their own professional confidentiality rules (under standards like PCAOB in the US or APB in the UK), so the information doesn't actually become public.
Accept this clause, as auditors are already bound by strict professional confidentiality duties and cannot disclose what they see. However, you can add language specifying that auditors must maintain confidentiality and use the information only for audit purposes, which reinforces the protection without changing the practical outcome.
Frequently Asked Questions
What does this clause mean in simple terms?
This clause allows your external auditors (accountants who verify your financial records) to see confidential information as part of their audit work.
Why should I care about this clause?
It matters because auditors need access to sensitive information to do their job properly, and if they cannot see the confidential data, the audit becomes meaningless and potentially misleading.
What are my options?
For example, an auditor reviewing a company's financial statements may need to see contracts with confidential pricing terms to verify the numbers are correct.
How does this affect small businesses?
This clause protects you because auditors are bound by their own professional confidentiality rules (under standards like PCAOB in the US or APB in the UK), so the information doesn't actually become public.