Audit of royalties

The client's situation

A client has entered into licensing contracts with companies in several foreign countries to ensure the local marketing of his products and his brand.
He receives monthly reports from his licensees, providing him with details of the products sold under the terms of the contract and the corresponding royalties.
Our client suspects that one of his licensees is deliberately understating the level of royalties payable and wishes to invoke the contract’s "audit clause" provided for this purpose.

The solution proposed by Accuracy

  • We can assemble a team possessing extensive experience in royalties reviews.
  • We will carry out the following analyses:
    • An analysis of the licensee and his reputation.
    • The identification of third-party companies with links to the licensee.
    • An analysis of the logistical chain taken by the products concerned (supply, production/storage, shipment, etc).
    • Comparison of the royalty statements with other available sources of information including financial statements, sales records, stock records and production data, etc.
  • We then prepare a report concerning the possible understatement of royalties, enabling our client to raise the matter with his licensee.

The Accuracy difference

  • The capacity to quickly organise a team possessing extensive experience in this type of assignment.
  • The ability to understand the licensee's operational and financial flows in order to identify any areas likely to reduce the payment of royalties.
  • Complete familiarity with auditing methods and the comparison of information.