Process

This page is devoted to explaining the Unclaimed Property Audit Process.  A recent survey that discusses trends in the Audit Process is discussed first, which is then followed by a detailed explanation of the Audit Process.

RECENT TRENDS

A survey of companies who were recently audited for Unclaimed Property was conducted in 2011 by The Conference Board, a global and independent business membership and research association.  The Conference Board publishes the “Leading Economic Index” among other surveys and research reports.

The Unclaimed Property survey, issued to 3,000 potential respondents, highlights recent trends in the Audit Process for Unclaimed Property:

  • 64% of respondents said that outside or contract auditors conducted their Unclaimed Property Audit and were paid a contingent fee ranging from 12-13%
  • Most audits were conducted by auditors representing multiple states (multi-state audits)
  • All states conducted audits except Hawaii
  • Respondents disclosed they were most audited by the following states:
    • 59% – Delaware
    • 41% – Illinois
    • 41% – Michigan
    • 37% – Tennessee
    • Audit period was generally between 10-20 years; however, 32% of respondents said that the audit period exceeded 20 years
    • Respondents disclosed they used the following quantity of employees:
      • 48% used between   1 -  5 resources
      • 29% used between   5 – 10 resources
      • 13% used between 10 – 25 resources
      • 10% used over 25 resources
      • Over 60% of respondents indicated that extrapolation techniques were used in calculating a company’s Unclaimed Property liability

A summary of The Conference Board survey can be found here:  http://www.conference-board.org/publications/publicationdetail.cfm?publicationid=2046

A copy of the survey can be downloaded here: expanded-liability-in-unclaimed-property-report

DETAILED AUDIT PROCESS

Each state is different; however, here is an overview of the Unclaimed Property Audit Process:

  • Your company is selected for an audit
  • You receive a letter (or letters) from the auditor
  • An initial meeting with representatives from each party is scheduled to discuss audit overview
  • Fieldwork begins
  • A closing meeting is conducted and preliminary findings are discussed
  • Issues are addressed by conducting research, communicating to owners, meeting with auditor to discuss audit adjustments, etc.
  • Final resolution by reporting and paying Unclaimed Property as result of audit