Question 4 - How do your auditors validate that you are receiving what is owed to you?

This is the forth question in the list of ten questions to ask your auditor if you are a Canadian based oil and gas company. The original post can be found here.

The third question(s) is/are:

How do your auditors validate that you are receiving:

a. All revenue due to you?

b. All royalties due to you?

c. All transportation, processing fees and compression fees due to you?

Basically, you should be asking your auditors these questions to ensure that they have a process in place to ensure that you are receiving all that should be owed to you. In most cases, auditors may not have the ability to correlate all the information that is required. This isn't their fault as they may not have the proper tools to do so.

If your auditors were to look at this information, they may be able to identify potential revenues for your company. Then again, they may find areas where you owe money to a partner. We have seen numerous cases where royalties are owed or a working interest isn't being collected.

These opinions are mine and may not reflect your view. If you would like to contact me, then please feel free to do so at info@argentis-group.com. Argentis Group assists oil and gas companies with operational audits to identify areas to reduce costs, increase revenues and increase the overall asset value of an oil and gas company.