12 Building a print circulations audit system

12.5. The architecture of an audit system

An audit system must be designed to collect, process, arrange, verify, and publish circulation data.

Audits can be carried out either on a real-time basis, or post-facto (after the facts). The former approach is used by the majority of existing ABCs. The reason is simple; it is extremely costly to make real-time audits. A full real-time audit means placing an individual next to each and every newsstand and mailbox to personally observe each financial transaction at the moment of its occurrence – a quite impossible task.

On the other hand, since publishers have to administer their operations in a legal manner, an auditor will be able to find (post-facto) enough information and documents that can stand the test of an audit. Some ABCs combine post-facto audits with real-time audits.

There is an important fact to note here: a full audit can be carried out only if the last issue of the audited period has been fully processed. This means not only that the physical distribution processes should be over, but also that the full reporting, settlement, invoicing, payments and accounting must be closed as well. If you consider the time that passes to administer these steps, then audits are carried out several months after the audit period ends. Many ABCs apply a combination of real-time (process) and post-facto verification.

An audit system must be able to provide data regardless of the variety and types of titles – frequency of issue, paid or non-paid distribution, distribution systems publishers are operating, the way the publisher is administering its documents and information, area of distribution, etc. At the end of the process, an ABC should publish audit certificates that contain standardized, and comparable data.

The elements of an audit system encompass:

• The audit certificate.
• Definitions.
• Classification (claiming) rules.
• Records and documents to be held, presented, and archived by publishers for audit purposes.
• Audit procedures.
• Audit programs.
• Auditors.
• Data reporting, gathering, processing, storage and publishing.
• Rules of publicity.
• Rules for complaints and penalties.
• Administration.
• Control.
• Education and training.

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