A careful auditor will ascertain exactly what trade secrets the company owns. The auditor should help the company document the development of these trade secrets in order to fend off a subsequent claim that trade secrets were stolen and not independently developed. If a company has to sue to protect its trade secrets, documentation of independent development is crucial to success. It is critical that the auditor determine whether and how the company keeps its trade secrets secret. Because failure to maintain secrecy will result in loss of trade secret status, the auditor must be prepared to help the company establish a procedure to safeguard these secrets. For example, are trade secrets kept under lock and key with restricted access? Can the existence of that procedure be later documented? Is the procedure always followed? How close is the photocopy machine to where the trade secrets are kept? If Coca Cola allowed all its employees access to its formula for Coke, that formula would no longer be a trade secret.
