ABC Membership
Associates

Agent Compliance Evaluation (ACE)

Program Summary

Objective: ABC auditors will conduct a review of internal controls and perform transactional testing procedures to obtain reasonable assurance that agents under review are capable of conforming to the established Audit Bureau of Circulations’ definitions, rules and policies governing subscription sales and reporting.

Provided the outcome of the auditor’s review is positive, ABC will issue a public opinion indicating that the agents’ internal controls and operating systems are designed to consider compliance to all ABC rules, policies and practices governing the qualification and reporting of circulation; and that during the on-site review, the auditors verified that the agent’s execution of their internal controls and operating systems were found to be adequate and operating effectively.

ABC will reserve the right to withdraw the public opinion at any time if it believes the agent’s operating environment and/or internal control process have changed to an extent that the opinion may no longer valid, i.e., there is increased risk that the agent is no longer processing subscription orders in a compliant fashion.


Audit Program Outline

  1. General
    1. Review ownership and organizational chart
    2. Outline of key responsibilities
    3. Subscriber-level record retention policies
    4. Quality assurance responsibilities
    5. Types of programs offered
    6. Sales compensation
    7. Production trends (seasonality, etc.)
  2. Agent Authorizations/Contracts
    1. Authorizations/contracts with publishers
    2. Clarity of terms (financial and non-financial)
    3. Agent/tape identification assignment
    4. Program/offer development
  3. Subscription Procurement
    1. Program documentation
    2. Types of programs executed
    3. Controls over categorization of production
    4. Channels of sales
    5. Subscription order processing
      1. Process flow
      2. Assignment of tape ids
      3. Price/term
      4. Input/output reconciliation
      5. Fulfillment transmittal prep
      6. Cancels/reinstates
  4. Subscription Order and Payment
    1. Source media retention
    2. Mapping—program id to creative
    3. Payment documentation (to deposit)
    4. Cancellation processing
  5. Sub-Agents (clearing operation)
    1. Items 2 – 4 above
    2. Quality assurance over sub-agents
    3. Availability of written agreements
    4. MPA identification
    5. Financial transactions
      1. Incentives
      2. Approvals
    6. Authorization/de-authorization policies and practices
    7. Independence
  6. Financial Records
    1. Reconciliation of production to
      1. Revenue
      2. Publisher payments
      3. Sub-agent transaction
      4. Fulfillment transmittals
    2. Sponsor/partner payments
    3. Bonus revenue sharing (sub-agents)
  7. Transaction Testing
    1. On-site record review
    2. Use of quarterly auditor samples
    3. Direct subscriber confirmations
    4. Net of all considerations
  8. Attestations from CEO
    1. Own production
    2. Clearing operation