AmiCOUR
IP
Guide to Royalty
Auditing Services
Royalty
Auditing Publications
Royalty Audit Checklist
by Ray Throckmorton, CPA
MONDAQ
Royalty Audit Checklist
by Ray Throckmorton, CPA
Les Nouvelles
Key Points to
Remember About Royalty Auditing
by AmiCOUR IP Group
Royalty Auditing Made Simple
Intellectual asset managers often state, “I’m
not sure the licensee is paying everything they owe, but I don’t want to
waste money on a royalty audit if they are paying us what they owe.” We
wrote this guide to help IAM's approach this question. Consider these
options:
Royalty Report Compliance
Evaluation
This includes examination of the licensee's
"paperwork" for indications of shortfall and a check of included
accounting calculations compared with license reporting terms. Our
initial "checks" often result in immediate discovery of inaccuracies. An
easily affordable compliance evaluation completed by an experienced
royalty auditing professional (not a general accountant) is the first
audit step performed.
Compliance Inspection &
Market Comparison
This includes a royalty report compliance
examination and then compares royalty payment history with known market
growth and economic cycles. We simply compare "what was expected" versus
"what was paid" and then determine whether or not an audit is
indicated. We also recommend this service for ongoing royalty
monitoring.
Royalty & License Compliance
Audit
A royalty and license compliance audit includes
one or more visits to the licensee's place(s) of business to examine
records and accounting procedures. This examination must be performed to
certain protocols designed to address the possibility of a dispute, and
may reveal a need to assert claims for unpaid royalties. Royalty
compliance audits should be performed by experienced royalty auditing
professionals (not general accountants) with proven track records.
Experience in royalty compliance auditing, litigation and dispute
resolution, and damage calculations (understanding case law and statute)
is essential.
Other Services: A
Comprehensive Program
Let AmiCOUR professionals work with your new
licensee to review their proposed royalty tracking and reporting
systems. After any required adjustments are made, we will provide a
preliminary confirmation of your licensee’s ability to comply with
license terms. When you anticipate a high value license, this is an
essential first step. Plan on automatically conducting an audit at the
end of the first year to ensure that all financial information is
provided and that it is complete and accurate, and then audit
periodically thereafter.