SigninG a Publishing Contract

3E. The RIght to Audit your publisher's books

If something seems amiss in your royalty statements, and you cannot resolve it with the publisher, you need the right to audit their records — that is, to get an independent party to review and confirm that you have been paid correctly. Audits can be expensive to you and annoying to your publisher, so this is not a right that you will want to exercise regularly. But having the right to audit can be an important protection when you really need to see what’s going on behind your royalty checks (or lack thereof). 


The contract should specify that if the audit finds significant shortfalls in royalty payments, the publisher must pay the cost of the audit. Any shortfall in royalty payments would become due under your normal royalty payment provisions — with interest, if you have a provision for late fees as described above. 

PUBLISHER agrees to allow DESIGNER or a firm of accountants on DESIGNER’s behalf to examine the books and records of PUBLISHER insofar as they relate to GAME and to take copies and extracts of such books and records.  Any such inspection shall be during normal office hours and not carried out more than twice in any calendar year and shall be at DESIGNER’s expense unless such inspection shall reveal an underpayment to DESIGNER of more than 5% or $1,000, whichever is greater, in which event PUBLISHER shall bear the costs of such inspection.

Beware of additional conditions that publishers may try to add to audit provisions, including: 

  • Requiring the audit to be done by a CPA;
  • Raising the threshold for when the publisher has to pay for the audit; and
  • Limiting the time you have to examine the records for a given accounting period. 

All of these are designed to make it harder for you to exercise your right to examine their books.

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