Royalty audits

Many companies in Sweden have registered patents or other rights. Patent holders and licensees can be situated in any part of the world, generating revenue for a Swedish company. Therefore how can these companies ensure that the correct revenue totals are reported accurately?

Under-valuations of sales, both deliberate and unintentional, by subordinate patent holders and licensees and misinterpretations of license agreements, can result in the loss of large royalty revenues for the patent holder. Consequently, there is a need in many companies to verify the information that is reported by the patent holders and licensees. In recent years alone, Mazars SET has identified unpaid royalty revenues amounting to millions of Swedish kronor through the auditing of patent holders and licensees.

We have comprehensive experience in royalty audits in many countries. For international assignments, we are also able to receive assistance from accounting firms in our network. Praxity, for example, is represented in more than 70 countries.

After an agreement is reached on the most prudent course of action, we can help a company determine if their licensees are reporting sales in compliance with the terms and conditions of their license agreements. When our audit is complete, our report will provide information about:

  • The license agreement
  • Reporting templates
  • Profitability analyses
  • Licensees’ internal control

We can also help a business to evaluate the reporting and follow-up systems used by their company to monitor royalty revenues. Accordingly, a royalty audit results in a report that includes our conclusions from the audit. It may also include recommended changes and our opinions of the license agreement, payment procedures, reporting templates, etc. We also submit an action plan for future audits.

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