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Services > Licensing/Royalty Audit  [+]  Assurance  [+]  Claims Audit  [+]  Consulting  [-]  Licensing/Royalty Audit       [+] Brochure (PDF)       [-] Case Histories       [+] C-Notes Newsletters (PDF)  [+]  Payroll (Employer) Compliance  [+]  Sarbanes-Oxley  [+]  Tax Preparation and Planning Related Industry Links  [+] Association of Certified Fraud Examiners (ACFE)  [+] Licensing Executives Society (LES)  [+] Licensing Industry Merchandisers' Association (LIMA)                                             Print this page     Email this page      Licensing Royalty Audit Case Histories For the histories presented, the overall fees, along with added revenues, were fully recovered by audit findings as a result of noncompliance by the licensees. CASE HISTORY 1 Industry: Interactive Entertainment Period of Review: Three years During the audit it was noted the licensee was not using actual amounts for returns but rather was estimating returns based on industry statistics. This was not in adherence to the licensing agreement that required the reporting of actual returns. The appropriate amounts were then recalculated by the licensee resulting in an audit finding of over $250,000. CASE HISTORY 2 Industry: Electronic Game Period of Review: Three years During our audit it was noted the licensee was not reporting all transactions surrounding an electronic sports game as required by the licensing agreement. The appropriate royalty amounts were then recalculated using all transactions and resulted in an audit finding of over $700,000, including accrued interest. CASE HISTORY 3 Industry: Collectibles Period of Review: Three years During our audit we noted packages containing “free” sets of licensed collectibles at a retail value of $79.00. We calculated that 14,344 packages were sold with sales totaling $1,133,176. Co-mingling non-licensed and licensed products within the package was restricted by the license agreement. This resulted in royalty recovery and a discontinuance of the current practice. CASE HISTORY 4 Industry: Screw manufacturer Period of Review: Three years Royalty audit fieldwork at the licensing site uncovered significant under-reporting of royalties resulting from the breakdown of an internal control process in which the patented product was originally included in the shop drawings but mislabeled in a revised version of the drawings. Further, there were several different parts and tools for which the client was receiving minimal royalties. This situation was resolved and the audit fee was paid by the licensee. Want to Know More? To learn more about what we can do for your organization, contact us or call 1.866.464.2839 Back to top Contact William Voorhees•202.331.9880 (Washington,DC)       Contact us

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