The following are the audit steps to audit/vouch/verify the money receipts from royalties received:
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Sales Proceeds From Royalties received
1 Verify the relevant contract and ascertain the provisions relating to the conditions of royalty such as rate, mode of calculation and due date. 2 Check the periodical statement received in respect of books printed, sold and stock lying at different locations. 3 Check the computation in the royalty statement and that any deduction or adjustment made from the royalty due is as per agreement conditions 4 Ensure that what’s are stated in the agreement is what the company has received. Also check the supports and bank statement to ensure actual receipts of such royalties 5 Ensure the correct posting and classification of the income otherwise profit is understated.
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