In today’s complex technology landscape, organizations rely on countless software systems—some developed in-house, others bought or integrated over time.  Software is rarely a one and done situation and unless you are doing deep audits of your tech stack regularly an organization has no way of knowing if they are at risk. Knowing how secure, efficient, and compliant your software is,   quality code that is valuable intellectual property are only a few benefits of a software audit.  In the time of cybercrime and malicious actors proactive auditing is your best safety net to keeping your business safe. 

Whether you’re a growing tech company, a heavily regulated enterprise, or a business preparing for acquisition, a software audit offers deep insight into the quality, security, and compliance of your digital assets. The first step to ensuring your tech stack is secure is understanding what an audit is, why you need it and how to get them done. 

Why Do Organizations Need a Software or Code Audit? 

There are several strategic, legal, and operational reasons to conduct a software or code audit: 

 1. Security Assurance 

Audits help uncover vulnerabilities that could be exploited, especially in legacy systems or custom applications. This is essential for avoiding breaches and data loss. 

 2. Quality & Technical Debt Assessment 

Audits surface issues like outdated frameworks, complex logic, and spaghetti code—providing a roadmap for modernization and refactoring. 

 3. License & IP Compliance 

Using open-source or third-party code without proper licensing can expose companies to legal risks. An audit ensures compliance and protects intellectual property. 

 4. M&A Due Diligence 

In mergers and acquisitions, a thorough audit ensures that the software being acquired is stable, maintainable, and free of legal or security risks. 

 5. Performance Optimization 

An audit can highlight inefficient algorithms, poor database queries, or infrastructure bottlenecks—allowing for tuning and optimization. An audit can also help uncover inefficiencies within your cloud-based networks. 

 6. Regulatory Compliance 

Companies operating withing sectors like finance, healthcare, and defense require software to meet strict regulatory standards, this includes third party companies who sell their software into these sectors. An audit ensures systems are compliant with those frameworks. 

Software Audit  or Code Audit? 

A software audit is a comprehensive examination of software systems, codebases, licenses, architecture, and documentation. Its purpose is to assess whether your software meets business, legal, and technical standards—and to identify risks or inefficiencies. 

This process might include evaluating: 

• Software architecture and system design 

• Code quality and maintainability 

• Licensing and intellectual property compliance 

• Security vulnerabilities and exposure 

• Performance and scalability 

• Regulatory and industry compliance (e.g., PCI, ADA, AODA, GDPR) 

Software audits can be broad or targeted depending on business needs. 

A code audit is a focused subset of a software audit, specifically reviewing the source code of an application. It’s usually performed to assess: 

• Code readability and documentation 

• Adherence to coding standards 

• Bug-prone logic or poor architecture 

• Security flaws and potential backdoors for attacks 

• Dependencies and outdated libraries 

Code audits are typically done during major releases, prior to mergers, or when adopting third-party software to ensure compatibility, quality, security, and maintainability. 

Internal vs. Third-Party Audits: What’s Better? 

Both internal and external audits have merit—but they serve different purposes. 

 Internal Audits 

Pros: 

• Familiarity with systems and history 

• Lower immediate cost 

• Can be iterative and ongoing 

Cons: 

• Potential bias or blind spots 

• Limited expertise in security or licensing law 

• Not always seen as credible by external stakeholders 

• May lack a deep understanding of legacy software necessary for a thorough audit 

Internal audits are useful for regular check-ins or continuous code quality initiatives. 

 Third-Party Audits 

Pros: 

• Objective and unbiased assessment 

• Deeper domain expertise (e.g., security, compliance, open-source licensing) 

• High credibility—especially for investors, partners, or regulators 

• Ability to benchmark against industry standards 

Cons: 

• Higher cost 

• May require onboarding or access to sensitive systems 

In critical situations—like a major funding round, security incident, compliance audit, or acquisition—third-party audits are often essential. They offer independent validation and help organizations make high-stakes decisions with confidence. 

Different Types of Software Audits and Their Purpose 

Depending on your needs, software audits come in various forms: 

Often, organizations combine several of these in a single comprehensive review, especially during digital transformation or platform consolidation initiatives. 

Final Thoughts 

A software or code audit isn’t just a technical exercise—it’s a strategic investment. It uncovers hidden risks, improves system performance, and enhances confidence in your technology, whether you’re scaling up, pursuing funding, or just looking to innovate more responsibly.  While internal reviews are useful for ongoing maintenance, proactively bringing in an external partner provides the credibility, expertise, and objectivity needed to make bold decisions or satisfy stakeholders. In a fast-moving tech world, the cost of not knowing what’s under the hood can be far greater than the cost of an audit.