Most royalty audits take greater than one year to complete and settle, but, once in a while, an audit takes less than a year.
Thursday, February 17, 2022
Friday, February 11, 2022
Why Your Forensic Accountant May Not Provide Services on a Contingency Basis (i.e., Compensated on a Percentage or Commission of Client Recoveries)
As a forensic accountant, I almost never perform work on a contingency or deferred fee basis for several reasons, including:
- It introduces some apparent conflicts (e.g., whether we take an aggressive approach for short term gains at the expense of a profitable counterparty-client relationship)... not to mention, who is our client anyway? It is often not one of the parties to a case.
- It often compromises our ability to provide timely service since we have to prioritize other work to ensure we have the cash to pay our employees for their work
- Our work will likely be inadmissible in court since contingency accountants or auditors have a financial stake in the outcome of the case
- For most of our clients, because they have a great deal of assets at stake, usually it is most cost-effective to engage us on our standard hourly basis
- On the other hand, it is not profitable for us to accept very small contingency matters
- There are lenders to clients who need to borrow money to afford legal costs - search "litigation financing" to learn more about this.
Labels: contingency fee, fee, fee structure, fees, forensic accountant, hourly, percentage, royalty auditor