| Commentary

426 Accounting and recoupment

| Commentary

426 Accounting and recoupment

A producer is unable to monitor the performance of a distributor under either a production financing and distribution agreement or a straightforward distribution agreement or pre-sale agreement unless the producer has full powers of audit and inspection. Some agreements only permit the producer the right to demand a certificate of the distributor's auditors, and this certificate is deemed to be conclusive proof of the accuracy of the accounting statements. The viewpoint of the auditors of any distributor or even an independent expert must inevitably be different from that of a producer. Many film audit investigations disclose

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