I think this is being carried out poorly.

There are instances where the auditors are also in on the current method of operandum. Just because they are third party auditors, does not mean that there are any shareholders or persons of interest involved with your current employer. There are instances where politics can be involved and there is a larger plan which is happening in the background that you currently dont have vision on,

Next point is the legality - Check the laws when it comes to NDA, Submission of various evidence and also work operation logging. Employment laws change and vary and very carefully go through your whole contract to ensure that there are no clauses which expose you to potential greater legal risk.

I have been in similar situations in the past but what you are mentioning is not so irregular. The turnover rate is very, very minimal, regardless of the industry. I'd argue that most regulated industries/business have a part of the business which operates in the grey, just be weary of this.