Review of employment agreements is also critical. The auditor should ascertain whether the employee is obligated to disclose and transfer discoveries and inventions to the company. These agreements must also restrict the employees' right to disclose or use proprietary information, a carefully chosen term that falls short of trade secrets protected by statute. Finally, buyers and investors crave restrictions on post-employment competition, narrowly drawn so as to be enforceable. Even when they exist, employment agreements are often put away and forgotten. A review will require that they be read and may suggest important changes.
