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ABC Board Acts to Reinforce Confidence in ABC Audit

SCHAUMBURG, Ill. (July 12, 2004) -- The Board of Directors of the Audit Bureau of Circulations (ABC), at its just-concluded July 7-10, 2004 meeting, implemented a series of actions designed to reinforce confidence in the integrity of ABC-audited circulation information.

The ABC Board acted to further define the "censure" provision of ABC Bylaws. This provision will be applied to those newspapers that experience an adjustment of at least five percent and to those periodicals that experience two consecutive audit adjustments of at least five percent. In addition, publications that, in the judgement of the Board, file a fraudulent ABC Publisher's Statement or knowingly circumvent ABC rules will also be "censured."

The Board also acted to delineate the penalties that will be imposed upon "censured" publications:

• They will be required to submit their circulation claims to more frequent audits: for the two years following censure, their records will be audited every six months, rather than annually.
• For one year following censure, their circulation claims will be excluded from FAS-FAX, ABC's semi-annual report of "top-line" publisher circulation claims. There will also be a notation in FAS-FAX explaining this exclusion is a result of the "censure."
• ABC will publicly disclose specific audit issues both within the ABC Audit Report, and in a separate notice to members.
• ABC will notify the governing body (e.g., the audit committee or the Board of Directors) of the "censured" publication of the "censure" action. ABC will also notify the governing body whenever ABC audit management believes the publication is not cooperating to complete the six-month audits in a timely manner.
• Censured publications will be required to submit to the ABC Board a plan of action for correcting their practices.
• ABC will levy a cash fine against a publisher found to have submitted a fraudulent circulation statement.

In addition, the ABC Board took steps to make the ABC audit even more stringent by adopting the principles of the American Institute of Certified Public Accountants (AICPA) Statement on Auditing Standards (SAS) #99. This Statement provides guidance as it relates to fraud. The Board directed ABC audit management to consider implementing ABC's existing, more-intensive audit programs on all audits.

The ABC Board also censured Synapse Group, Inc., a magazine sales agent, for improper record-keeping. Synapse will be required to submit a plan for correcting its practice to the ABC Board.

"The actions," stated S. Scott Harding, Chairman/CEO, Newspaper Services of America, "represent responsible first steps in the process of preserving trust between publishers and advertisers. Together, we are committed to making this process work."

David W. Leckey, Senior Vice President, Consumer Marketing, Hachette Filipacchi Media U.S., agreed. "We, as publishers, believe in the ABC audit process. ABC audits are rigorous and extremely thorough. We will take whatever steps are necessary to preserve the integrity of the ABC audit process."

With nearly 4,300 members, ABC is in its 90th year as the first and largest circulation-auditing organization in the world, maintaining the world’s foremost electronic database of audited-circulation information and a growing array of verified readership, subscriber demographics and online activity data. ABC offers reports and services in a variety of flexible formats, including print, spreadsheet, CD-ROM and online at http://www.accessabc.com.