Licensing, Royalty, and Compliance Auditing

S&B is experienced in analyzing contract provisions and in verifying compliance with the terms and conditions of licensing and royalty contracts. Our significant compliance practice is based on our knowledge of many industries and our professionals are well trained in auditing procedures and practices related to determining compliance with licensing and royalty contracts. This expertise affords our clients the knowledge and satisfaction that all reported and remitted royalty payments meet the terms and conditions of the licensing or royalty agreements.

Approach - Meeting the Client’s Objectives

• Confirm that all parties comply with the terms and conditions of the licensing/royalty agreement
• Determine the sales basis for which royalties have been computed
• Ensure royalties are accurately calculated
• Verify royalty payments are paid on a timely basis

Audit Plan

• Gain a thorough understanding of the licensing agreements
• Prepare for the audit by contacting licensors and licensees, holding initial meetings and becoming oriented with their systems and procedures.
• Assess internal controls
• Customize audit procedures based on an understanding of operations, systems, procedures and internal controls

Perform fieldwork:

• Test various accounts: sales, returns, discounts, etc.
• Meet with the licensee to discuss findings and resolve misunderstandings and misinterpretations
• Meet with the licensor to discuss findings and claims
• Issue report
• Respond to licensee’s subsequent rebuttals and assist in collections

Royalty Compliance for the Recording, Film and Broadcasting Industries and Brand Licensing Companies

S&B has significant experience in the recording, film and broadcasting industries. Our compliance practice is based on our strong industry knowledge and our professionals who are knowledgeable in entertainment industry procedures and practices.

Download Licensing, Royalty, and Compliance Auditing Brochure