Music and entertainment royalty audit specialists help artists, songwriters, producers, and rights holders verify that their royalty payments are accurate and complete. These specialists analyze contracts, royalty statements, streaming data, licensing reports, and payment histories to detect underpayments and ensure all earned revenue is properly reported.
In an industry driven by complex global accounting systems, missing data, and inconsistent reporting practices, royalty audit experts protect creators’ financial rights and maximize long-term income.
Why Do Artists and Rights Holders Need Royalty Audit Specialists?
Artists and rights holders need royalty audit specialists because royalty reporting is rarely 100% accurate. The first sentence answers the question directly, and the explanation follows.
Royalty income often comes from multiple sources:
- Streaming platforms (Spotify, Apple Music, Amazon, YouTube)
- PROs like ASCAP, BMI, and SESAC
- Music publishers and mechanical royalty agencies
- Film/TV licensing and sync placements
- International collection societies
- Digital distributors
- Record labels and management companies
Each of these sources uses different systems, timelines, and calculation methods. Without a specialist, underpayments may go undetected for years.
What Types of Royalties Can Be Audited?
Royalty audit specialists can review any earnings tied to intellectual property or creative work.
Music Royalties
- Mechanical royalties (songwriting/publishing)
- Performance royalties (PROs)
- Streaming royalties (DSPs)
- Sync licensing payments
- Neighboring rights royalties
- SoundExchange collections
Entertainment & Media Royalties
- Film and TV residuals
- Distribution revenue
- Licensing and merchandising income
- Podcast and digital content ad revenue
- YouTube, TikTok, and creator monetization
Publishing & Literary Royalties
- Book sales
- Foreign rights income
- Audiobook licensing
If revenue depends on IP usage, specialists can audit it.
How Do Royalty Audit Specialists Conduct an Audit?
Royalty audits follow a structured, snippet-friendly process that can be summarized in six steps.
1. Contract & Agreement Review
Specialists begin by analyzing contracts to understand:
- Royalty rates
- Recoupment rules
- Territories and rights
- Payment schedules
- Audit clauses
This sets the baseline for evaluating whether reported payments are correct.
2. Data & Statement Collection
Artists provide royalty statements, streaming reports, dashboards, and licensing documents.
Specialists may also request:
- PRO histories
- Distributor reports
- International statements
- Sales data
- Sync usage records
3. Independent Data Verification
The auditor compares reported revenue with independent sources such as:
- Stream counts from platform dashboards
- PRO performance data
- YouTube Studio and TikTok analytics
- Public and private licensing databases
This helps detect missing or inaccurate reporting.
4. Calculation & Error Identification
Common issues include:
- Miscalculated royalty percentages
- Missing streams or downloads
- Improper expense deductions
- Incorrect recoupment balances
- Foreign royalties not passed through
- Unreported sync placements
5. Reporting Findings & Preparing Claims
Specialists prepare a detailed report showing:
- Underpayment amounts
- Supporting calculations
- Documented discrepancies
- Contract references
6. Recovery Negotiation
If an underpayment is identified, they handle:
- Communication with labels or publishers
- Evidence submission
- Settlement discussions
- Agreement on back payments
What Problems Do Royalty Audit Specialists Commonly Find?
Royalty audits often uncover recurring issues, especially in high-volume catalogs.
| Issue Detected |
Description |
| Missing International Royalties |
Overseas societies delay or fail to report usage |
| Incorrect Streaming Calculations |
DSP data mismatches or incorrect royalty tiers |
| Overstated Recoupable Expenses |
Labels improperly charging marketing or tour costs |
| Unreported Syncs |
Usage in TV, film, games, or ads not disclosed |
| Metadata Errors |
Incorrect ISRCs or credits affecting royalty payouts |
| Delayed Payments |
Companies holding revenue beyond contract terms |
These issues can significantly reduce an artist’s income—especially over long periods.
Who Benefits Most from Hiring a Royalty Audit Specialist?
Royalty audit specialists provide detailed examinations of royalty statements, usage reports, and payment flows to identify missing income, miscalculations, or underreported usage. These services are especially valuable for creators and rights holders with complex revenue sources or long-term licensing agreements.
You benefit from audit services if you are:
- A recording artist or band: Artists signed to labels often receive statements that involve multiple revenue buckets—streaming, mechanical, neighboring rights, sync, merchandise, and more. Audits help confirm that every revenue line is properly tracked and paid.
- A songwriter or producer with publishing income: Publishing royalties come from performance rights organizations, mechanical royalties, sync placements, and global sub-publishers. With money flowing through multiple intermediaries, underpayment is common.
- An independent artist using multiple distributors: If you release music through several platforms or aggregator services, a specialist ensures accurate reporting from each source and checks whether fees, splits, and deductions match your agreements.
- A rights holder with a legacy catalog: Older works often suffer from outdated accounting systems, missing usage reports, or historical errors that compound over time. Catalog owners frequently uncover substantial discrepancies.
- A digital creator with monetized content: YouTubers, podcasters, and creators earning through UGC, licensing libraries, or digital ad revenue can face inconsistent reporting or missing usage data across platforms.
- A composer for film, TV, or video games: Media composers often deal with backend royalties from libraries, cue sheets, PROs, game publishers, and international societies—each of which may incorrectly track performance data.
- An estate managing royalty-bearing works: Heirs benefit from independent verification to ensure continued accuracy in royalty payments, especially when multiple parties administer the catalog.
Specialists are particularly valuable for creators with global distribution, multiple revenue streams, or long-running contracts, where small errors can accumulate into significant underpayments.
How Much Can Artists Recover Through Royalty Audits?
While recovery amounts vary, most artists reclaim 5%–30% in unpaid or underreported royalties during a professional audit. In some cases—especially with older catalogs or international works—the recovery can be even higher.
Artists and rights holders typically recover more when their catalog includes:
- Heavy international usage: Foreign societies often have slower reporting cycles and inconsistent tracking, making global royalties a common source of underpayment.
- Long-term contracts with outdated accounting methods: Older deals may include manual calculations, legacy systems, or clauses that no longer align with today’s digital revenue streams.
- Major sync placements: Sync deals involve multiple stakeholders, cue sheets, PROs, and back-end performance royalties—any of which may be misreported.
- Complex royalty structures: Tiered rates, recoupables, packaging deductions, producer splits, and cross-collateralization can introduce inaccuracies.
- Older works with poor or incomplete recordkeeping: As catalogs age, missing data, legacy systems, and staff turnover can create inconsistencies that are only uncovered through a formal audit.
Even small discrepancies, such as a missing percentage point or unreported streams, can accumulate into significant lost income over years of usage.
How Often Should Rights Holders Conduct a Royalty Audit?
Most specialists advise creators and catalog owners to conduct a royalty audit:
- Every 2–3 years: This cadence ensures that errors are caught early, before they grow into large multi-year discrepancies.
- Whenever a contract is about to expire: Audits before contract expiration help verify the accuracy of lifetime earnings and provide leverage during renewals.
- Before renegotiating with a label, publisher, distributor, or administrator: Verified audit findings can strengthen your negotiating position, especially if you uncover systemic underreporting.
Regular audits protect creators from years of compounding mistakes and ensure royalty payments stay accurate, transparent, and aligned with contractual obligations.
Need Music & Entertainment Royalty Audit Specialists?
If you’re an artist, songwriter, producer, or rights holder, a professional royalty audit can help uncover missing revenue, fix reporting errors, and protect your long-term earnings. Dimov Audit provides specialized audit support, royalty compliance reviews, and entertainment accounting for creators across the U.S.
Need help reviewing your royalty income? Contact Audit today for expert assistance.
FAQs
Do I need a royalty audit if I’m an independent artist?
Yes. Digital distributors and streaming platforms also generate reporting errors, especially internationally.
Can a specialist audit revenue from YouTube, TikTok, or social platforms?
Absolutely. Creator monetization data is one of the fastest-growing categories for audits.
How long does a royalty audit take?
Most audits take 3–6 months, depending on contract complexity and data availability.
Are royalty auditors the same as CPAs?
Some are CPAs, while others are specialized analysts. What matters most is experience in music and entertainment royalty accounting.
Is a royalty audit worth it for small catalogs?
Yes—small catalogs with strong streaming performance or sync activity can still be significantly underpaid.
