Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Audit definition

What does Audit mean? In asset-based lending, an audit is the lender’s on-site or desktop review of the borrower’s collateral, records and controls to verify the quality and value of funded assets and the accuracy of borrowing-base reporting. It is distinct from a statutory audit of financial statements under the Companies Acts. “Audit” in this context is a descriptive term used in facility documents (also called a collateral audit, field examination or survey), not one defined by legislation or case law. Audits typically occur pre‑lend and periodically during the facility, or on triggers (e.g. covenant breach, rapid growth or acquisition). Scope usually covers receivables...

Phase 1 environmental audits: transactional, compliance and planning uses; process, standards, costs and timing; managing contaminated land and regulatory risks via warranties, indemnities and insurance

Published by a LexisNexis Environment expert

Practice notes

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What is a phase 1 audit?

A Phase 1 environmental audit is an impartial appraisal by external environmental consultants of an organisation’s adherence to environmental legislation and its management systems. The purpose is to methodically and precisely examine site activities and the local environmental context to identify breaches and the likelihood of contaminated land liabilities. By flagging environmental risks, their potential impact can be gauged and suitable remediation actions proposed.

When will a phase 1 audit be instructed?

The need for, and extent of, any audit will vary according to several considerations, such as:

the terms governing a transaction
current and historic operations
site characteristics and environmental sensitivity
the client’s risk appetite and available budget

In most cases, a Phase 1 audit is commissioned because of:

potential environmental liabilities highlighted by an initial desktop review (see: Environmental investigations—types of searches and investigations)
a transaction event, including freehold or leasehold transfer, movement of funds, or refinancing
a planning condition imposed ahead of redevelopment or a change of use
the need to evaluate operational compliance

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Jake Hawkey

Argyll Environmental

Jake holds a BSc in Geography and an MSc in Environmental Management & Assessment, combining academic expertise with over a decade of hands-on industry experience.He began his career with Argyll Environmental in 2011 as an environmental consultant, specialising in contaminated land and flood due diligence. This early work gave him invaluable insight into the practical challenges faced by property professionals navigating residential and commercial real estate transactions.Over the years, Jake has advanced into leadership roles, including serving as Consultancy Manager, where he successfully managed and delivered a wide range of complex contaminated land projects. His commitment to knowledge-sharing extends beyond his consultancy work—he has been a guest lecturer at Brighton University, contributing to the Environmental Auditor Course in partnership with the Institute of Sustainability and Environmental Professionals (ISEP).Today, Jake is recognised for his ability to combine technical expertise with a deep...

Web page updated on 21/05/2026

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