Ready for a Software Audit? Avoid These Six Costly Software Audit Mistakes

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Software audits are time-consuming, expensive, and a drain on company resources. Dallas attorney, Robert J. Scott, of Scott & Scott, LLP, shares tips to avoid costly software audit mistakes.

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Software audits are time-consuming, expensive, and there are costly mistakes that should be avoided.

Robert J. Scott, of Scott & Scott, LLP, whose Dallas law firm has represented more than 150 clients facing software audits nationally suggests how to avoid six costly software audit mistakes.

IBM, Microsoft, Autodesk and other commercial software publishers, and their trade organizations like the Business Software Alliance (BSA) and the Software & Information Industry Association (SIIA) are pursuing businesses to enforce the copyrights in the products they publish.

The BSA and SIIA invite disgruntled employees to report software piracy and offer up to $1 million in cash rewards.

Software Audits are Time-Consuming, Expensive, and a Drain on Company Resources

According to Robert J. Scott, Managing Partner, of Scott & Scott, LLP, whose Dallas law firm has represented more than 150 clients facing software audits nationally, “Software audits are time-consuming, expensive, and there are costly mistakes that should be avoided.”

Scott’s suggestions to avoid costly software audit mistakes include:

1. Use of an inadequate tool to conduct the software audit.
There are many ways a business can tackle the audit process. It can hire a law firm that specializes in software audits to conduct the review, it can hire external IT consultants, or it can proceed with its own in-house software audit.

2. Use of free or low cost software auditing tools.
The BSA often suggests a number of tools to assist with a self audit, including Novell, Symantec, Frontrange Solutions, Belarc and Spiceworks. Because many of these tools are available for little or no licensing fee, they appear to be attractive alternatives. More often than not, these tools inaccurately report data and fail to exclude information that is outside the scope of the audit request.

3. Failure to ensure audit results accurately reflect what was installed on the effective date of the audit.
For company self audits, it is essential to verify the results prior to submitting any information to the BSA or SIIA. Because there are often out-of-scope products, trial versions, and remnants of previous software installations reported in many audit tools, it is imperative to validate the results of the audit before producing the audit to the BSA or SIIA.

4. Purchasing additional software upon receipt of audit request
Purchasing additional licenses of installed software in response to an audit request letter will have no effect on the outcome of the audit. The date of the letter is the effective date in BSA and SIIA audit matters.

5. Over-reporting can carry significant consequences.
Each product mistakenly reported as a licensable product for which a business is unable to demonstrate license ownership typically results in a penalty based on the manufacturer’s suggested retail price (MSRP). In most cases, a multiplier for each product is included in the BSA and SIIA’s settlement offer.

6. Failure to seek advice when in doubt.
It is vital to seek the advice of a knowledgeable attorney or consultant prior to submitting any information to the auditing entity if there is any doubt regarding the accuracy of the results.

Software license compliance can cost large enterprises millions of dollars; smaller enterprises often face even greater costs as a percentage of revenue. Complying with the complex and ever-changing license agreements that publishers mandate requires enormous human and financial resources.

For additional free resources visit: http://www.scottandscottllp.com, and http://www.bsadefense.com/resources.asp, where you’ll also find Scott & Scott’s Fine Calculator. Many companies have found it to be a helpful risk assessment tool.

About Scott & Scott, LLP (http://www.scottandscottllp.com and http://www.softwareaudit.com) is a leading law and technology services firm representing businesses in matters involving software licensing. Scott & Scott’s legal and technology professionals provide software audit defense and software compliance solutions, all protected by attorney-client and work-product privileges.

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