Abstract
Almost all licence agreements provide the right for the licensor to review the accounting records of the licensee. Such a review (sometimes called an audit) is undertaken to ensure that all licensed products subject to royalty payments are included in the calculation of royalties due, and that the calculation process itself is correct. This article discusses the pros and cons of such an audit focusing on experience in the USA, criteria for selecting whom to audit, things to expect from such an audit, and what you should receive from the person or accounting firm you select to conduct the audit. The results from a survey of university auditing practices are included.
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