Summary
When a Microsoft audit notice lands in your inbox, the instinct is to start making calls immediately. That instinct damages more audit positions than any technical non-compliance. The first 30 minutes determine whether you control the process or panic through it. Here’s exactly what to do.
It’s Monday morning, and that’s already stressful enough. You’re scanning your inbox and your eyes catch the subject line: “Microsoft Audit Notice - Action Required”.
Seems like an audit.
You naturally panic, even if for a brief second. Everyone does.
Don’t. Nothing bad has happened yet.
Control the first 30 minutes.
There’s no reason to call anyone yet. Not us, not your reseller, not Microsoft, not your IT director. You need 30 minutes first. These 30 minutes won’t determine your audit outcome, but they’ll decide whether you control it or it controls you.
Minutes 0-5: Print, Coffee, Read
First thing: print the letter. Physical paper.
While it’s printing, go to your coffee machine. Get coffee.
Go back to your printer. Grab the piece of paper. Find somewhere quiet.
Now read it. Slowly, calmly. If needed, read it twice or thrice.
Where did this come from? Is it from Microsoft’s LCC (License Contracts & Compliance) department? A partner company? A different Microsoft department?
What does it actually say? Does it say “Microsoft appointed auditor is…” and then name one of the Big Four firms? Does it say “SAM review” or “compliance review”? Does it mention “self-assessment”? Does it contain words like “trade laws” or “anti-corruption”?
What’s it asking for immediately? Usually it’s just requesting a kickoff meeting. Sometimes specific data. Sometimes just acknowledgement.
The answers to these questions determine what type of an audit you got. And depending on that, what you should do next.
Minutes 5-10: Is This an Audit?
There are four types of notices Microsoft sends. They look similar if you don’t know what you’re reading. They’re completely different in what they mean and how you respond.
The first type is a formal audit, specifically License Compliance Verification. You know it’s the one if it comes from Microsoft’s LCC department, quotes your specific agreement number, states “Microsoft appointed auditor is Deloitte” (or EY, KPMG, or PwC), and uses the formal language “license compliance verification” without saying “self-assessment”. It’s contractually enforceable. You agreed to it when you signed your agreement. You can’t reject it. It takes 4 to 12 months, sometimes longer. It’s exhausting, time-consuming, and can potentially mean millions in exposure. It’s the one everyone fears, and the rest of this article focuses on it.
The second one is a trade law compliance audit. You spot it by the words “trade laws”, “anti-corruption”, or “anti-bribery” in the letter. It usually only affects Microsoft partners or service providers. Sounds terrifying, but it’s relatively benign in practice. If you see these words, it’s not a standard compliance audit.
🖐 If you’re a hoster or service provider, trade law audits follow different rules. Learn more: Microsoft SPLA and CSP-Hoster Audit Defense.
The third type is a SAM review. This one says “SAM review” or “compliance review” and references a “recommended third party” rather than an “appointed auditor”. It may come from a Microsoft partner rather than a Big Four firm. Here’s the critical distinction: it’s NOT a formal audit. You CAN reject this one. It’s not contractually enforceable. It’s positioned as “voluntary”, though Microsoft won’t love you for declining. They’re rare these days but they still happen, and they require a different strategy.
The fourth type is a self-assessment request. The language is softer: “In accordance with your agreement, Microsoft requests you to self-assess…” It’s a legitimate request under your contract terms, but not an audit. You’re auditing yourself and reporting back. It’s a different process entirely.
For the rest of this article, we’re assuming you’ve got Type 1, the formal audit. If you’ve got something else, the principles still apply but the approach changes.
Minutes 10-15: Understand What’s Actually Controllable
If you’ve got Type 1, the formal audit, it’s happening. You can’t reject it. You agreed when you signed the contract. That’s done.
The 30-day notice period is ticking. That’s the contractual requirement Microsoft must fulfil before the audit begins.
Everything else is under your control.
You can’t stop the audit, but you control how it unfolds.
The timeline and project plan they’ll send you? That’s their wish list, not a requirement. Politely acknowledge their proposed schedule and counter-propose what works for you. You decide when meetings happen. You control how data gets provided - through proper processes, not ad-hoc responses. You control who talks to auditors.
Right now, they’re probably asking for just one thing: a kickoff meeting. Not data dumps, not immediate compliance reports, not architecture diagrams. Just a meeting to discuss the process. You can schedule that meeting for two weeks out if you need to.
Your agreement sets only two deadlines. Just two. The first is the 30-day notice period, which is already ticking. The second is 30 days to pay any settlement if there is one, and that’s at the end of the process, months from now. You control everything else.
Your contract actually says Microsoft “will not interrupt your normal business operations.” They can’t impose their schedule on you. They expect you need time to organise. Take that time.
Note down which auditor firm you’re dealing with. Note their proposed timeline, even though you’re going to ignore it. Note what they’re asking for immediately. Don’t try to figure out “what’s the trigger” - the auditor probably doesn’t know, and Microsoft won’t disclose it.
Minutes 15-20: Lock Down Communications
Send a message to everyone relevant in your organisation: “We’ve received a Microsoft audit notice. All communications with Microsoft or auditors must go through me only. No exceptions. Forward everything to me. Don’t respond directly.”
Include Technical Account Managers, Microsoft consultants, account executives, everyone.
Email your IT leadership specifically: “No data leaves organisation without written approval from me. Server lists, architecture diagrams, tool exports, everything.” Email Procurement: “Do not provide documentation or information without clearance from me first.”
Why does it matter so much? Because we’ve seen it dozens of times. An IT manager talks to an auditor directly, overprovisions data, doesn’t verify outputs for audit risks, or makes casual comments about the architecture. The auditor makes notes. Those comments become “findings” worth hundreds of thousands in the report. Negotiable mistakes? Maybe. But it’s better to avoid them than have another line item for the negotiation.
One careless comment can turn into a six-figure audit finding.
Your IT people are professionals. They’re good at their jobs. However, they don’t understand audit dynamics. You need to protect them from themselves. Keep them separated from auditors. Everything goes through central control, through you or whoever you designate as the single point of contact.
Minutes 20-25: Create Your Stakeholder List and Check for Conflicts
Notify people in your organisation about what’s happening. Start from the executive level, not the department level. Your list should include the board if appropriate, your legal team, key IT leaders, and Finance or Procurement directors. You’ll notify them properly once you’ve finished these 30 minutes and have your head clear.
Check whether the appointed auditor is already working for you on another project. It happens more often than you’d think. Deloitte does your financial audit, and now they’re appointed for your Microsoft audit. That’s a potential conflict of interest. Task your legal team with reviewing whether it creates any issues.
Also task legal with arranging an individual NDA with the auditor, not just Microsoft’s standard terms. They’ll push back on it. That’s normal. Keep insisting. There are specific reasons you want that protection. For now, just trust that you want it.
Minutes 25-30: Quick Assessment and Decide Your Next 48 Hours
You need to answer three questions honestly before you go any further.
First: do you have anyone in your organisation who’s been through Microsoft audits before? If yes, involve them immediately. If no, you need external expertise, and soon. Either way, having someone who’s done this before will give you peace of mind.
Second: do you have compliance data you actually trust? Be honest here. “We have a SAM tool” doesn’t count as an answer. Your tool data might be useful as a starting point. It might also be completely wrong. You don’t know yet, and neither does your IT team.
Third: do you understand your complete IT environment? Not just what’s deployed, but the factors that affect licensing. Where are your datacentres? How does remote access work? Work from home policies? BYOD? Outsourced infrastructure? Hosted services? Cloud deployments? Virtualisation architecture? Disaster recovery environments? Most organisations have some of these mapped, but not all of them documented in a way that survives an audit. That’s fine. Now you know what you need to build.
Based on those answers, decide what your next 48 hours look like. Our recommendation is what we call the hybrid approach: get a quick consultation with independent experts to understand what you’re facing and get a strategic framework, then decide your next moves based on reality rather than panic.
🖐 Get expert defence for high-stakes audits. Learn more: Microsoft Audit Defense.
Don’t rush. The audit will take at least four months. Complex ones take 6 to 12 months. We’ve seen some stretch to years. You have time. Rushing creates mistakes. Rushing puts unnecessary pressure on your resources when sustained, measured response works better. Nothing drastic is happening today. Nothing drastic is happening this week. The 30-day notice gives you breathing room. Use it.
What NOT to Do
Don’t accept their proposed timeline immediately. It feels professional and cooperative, but it signals that you don’t have a strategy. Counter-propose what works for you.
Don’t agree to meetings before you have strategy in place. “Let’s just do the kickoff and see what they want” is tempting, but schedule meetings when you’re ready, not when they suggest.
Don’t let IT talk directly to auditors, even on calls where you’re present. Everything needs to route through central control. You’re not micromanaging, you’re protecting people who don’t understand the dynamics.
Don’t call your reseller for audit advice. They’ll want to help. They’ll sound helpful. They have contractual obligations to Microsoft. Their margins are under pressure. They’re structurally incentivised toward you paying penalties because you’ll buy licences through them to fix the gaps. It’s not malicious, it’s just how the commercial relationships work. They can help you with basic licensing rules, finding invoices, and explaining contract terms. They cannot help you with audit defence strategy or negotiation.
Don’t rely on your SAM tool output as your defence. Auditors may accept your tool data, or they may reject it entirely and use their own discovery methods. We’ve never seen a tool calculate Microsoft compliance correctly without expert validation. Your tool data is a starting point, not a defence.
🖐 Understand the limitations of SAM tools in Microsoft audits: Why SAM Tools Fail Microsoft Audits.
You’re Through This
Your 30 minutes are done. You’ve controlled the moment. You’ve locked down your organisation. You know which type of audit you’re facing and what’s actually controllable.
The audit will take months. You have time. The next 48 hours are when you figure out your strategy.
Now you’re ready to call us.