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Contracting an Audit: Sample Language

September 14, 2010

The following text provides sample agency contract language for conducting an audit:

Upon not less than five (5) business days’ notice, Agency Records (other than payroll records) shall be open to inspection,
copying, and audit by Advertiser or an Advertiser representative, during Agency’s normal business hours at Agency’s place
of business. Advertiser shall have the right to examine, either directly or through its authorized representatives or agents,
during business hours and for a reasonable period of time, all books, records, accounts, correspondence, instructions,
specifications, plans, drawings, receipts, manuals and memoranda pertinent to this Agreement. Advertiser’s right of inspection
shall not apply to Agency’s trade secrets or other proprietary information properly designated or asserted as such.

If any records audit reveals that Agency has overcharged Advertiser, Agency shall immediately refund such overcharge
(“Overcharge”) to Advertiser. If the Overcharge is greater than 5% of the billed charges, the Advertiser’s external audit
expenses shall be reimbursed to Advertiser by Agency. If Agency has not retained or cannot product Agency Records
which Advertiser requests and as a result thereof Advertiser is required to pay a fine, penalty or other monetary amount
(“Penalty Payment”), Agency shall reimburse Advertiser the Penalty Payment and any other costs incurred by Advertiser
as a result of Agency’s failure to retain Agency Records for the required time period.

Source

Source: Doug Wood, Please Be Ad-Vised, ANA.

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