About the Course:
According to some industry veterans, 99% of licensees underreport royalties. In some industries, more than 90% of licensees are underreporting royalties by more than 20%. Further, in excess of 80% of licensees commit non-monetary contract violations. This session presents real world examples of royalty auditing tales such as:
- How failing to base royalties on units produced can present significant challenges for licensors when warehouses mysteriously burn down the night before a royalty audit is to be conducted.
- How failing to delineate what constitutes acceptable advertising expenditures can enable licensees to classify nocturnal entertainment as a legitimate advertising expense as required by the licensing agreement.
- The fine line that royalty auditors must walk when conducting royalty audits in Asia: One the one hand, royalty auditors must socialize--after-hours and with alcohol--with licensees to gain access to the books and records. On the other hand, they cannot allow this socializing to get in the way of performing their duties on behalf of the client.
- Common causes for underreporting
- Common findings during royalty audits
- Suitability of accounting standards for licensing agreements
- Appropriateness of the use of terms such as "reasonable" and "customary" in licensing agreements
- Definition of qualifying deductions
- Risks of anti-trust issues when conducting royalty audits on competitors
- Methods of compensating royalty auditors
- Enforceability of penalty provisions
- Accounting for missing inventory and value-added taxes
- Executing non-disclosure agreements
- Drafting of audit paragraphs
- Cost recovery and penalty provisions
- Managing the royalty audit report
Course Leader: Sidney P. Blum, Partner, Green Hasson & Janks LLP
Sid leads the firm's royalty and contract audit practice, as well as the expert witness and litigation support practice. He has over 24 years experience in a variety of industries.
Prior to joining the firm, Sid was the principal in charge of the Valuation, Litigation and Forensic practice for a regional accounting firm and helped create the Contract Compliance Services practice for a Big Four accounting firm where he was a partner for approximately five years. While at the Big Four accounting firm, Sid wrote the firm's overall Contract Compliance Services global methodology and the Royalty Compliance methodology. Sid has been performing royalty, IP and other contract examinations for over 20 years. In addition, Sid was a Fortune 100 internal auditor for the entertainment and oil & gas industries for more than seven years.
Sid has testified as a damages expert witness in arbitrations and in court over two dozen times. He has directly supervised the contract compliance examinations of over $8 billion of royalties resulting in significant dollars of findings. His book, "Financial Elements of Contracts: Drafting, Monitoring & Compliance Audits" was published by Oxford University press in 2010. He is an avid world traveler having traveled to over 80 countries and enjoys road bicycling, Russian literature, and home remodeling.
Course Length: Approx. 1.0 hours
$175.00 PER USER
Need help purchasing this course? Please contact Neomi Barazani at 609-919-1895 ext. 100 or at email@example.com.