I think he refers to Microsoft auditing a business' licence compliance. Have you aquired the correct amount of licenses for all the instances you are running and accessing. Microsoft licensing is so insanely complex that even if you ask 2 MS sales reps what licenses you need to cover a certain scenario, you will get a different answer each time. This is also why an audit almost 100% results in finding non-compliance.

https://www.npifinancial.com/smartspend-bulletins/the-anatom...

An Enterprise customer of Microsoft agrees to be audited by MS. In exchange they pay a certain amount for effectively “unlimited use” of the appropriate software. In the past this meant volume license keys that would always activate; wouldn’t count how many devices, etc.

And MS audit would check that what you reported was what you had. And could result in big increases in contract pricing.

Now that everything is cloud this and 365 that I don’t know how much it applies anymore - everything is dynamic and traceable.

Famously in the early 2000s it was a huge issue for “medium” businesses who had used enterprise-style licensing. Tiny and small businesses just bought normal computers and software and would often escape notice.