Similar to any business, the cinema and theatre industry also undergo auditing and inspection so that they continue delivering a phenomenal customer experience to ensure the movie experience exceeds customer expectations. The cinema industry has to convince people to leave their homes and Netflix for cinema. Let us unravel the key areas to review for auditing.
Verifying Ticket Sales
The auditor will check a couple of things pertaining to the ticket sales. For instance, he/she will make sure that the cinema or theatre tickets are numbered serial-wise. Also, the cinema and theatre audit teams will ensure that the show tickets are allotted the same serial sequence number for the same class of the shows. In addition, the tickets that are booked in advance are verified in order to make sure they carry a unique serial number.
Tickets that don’t get sold are settled with the Entertainment Taxation and made sure that the issuance of complimentary tickets is under authorisation. More so, the sales’ statements for each day are cross-matched with the relevant entries in the cash book.
Analysing Advertisements’ Costs
The auditors are responsible for verifying the expenses incurred in advertisements. Moreover, the auditors have to review the contracts with the promoters to determine that both parties; cinema group and advertisers are on the same page. Therefore, if any expenses relating to an advertisement is turning out to be too costly then it is put in the category of an overdue revenue expenditure.
Verify Restaurants’ Sales
The auditor will carry out an in-house check of the cinema or theatre to determine that the diner is run by the cinema. If a particular restaurant is managed by the cinema then all the sales’ payments should be collected by the cinema and it is the duty of the auditor to verify those payments. Further, the auditor will review the fixed sum or percentage agreements made between a third party restaurant and the cinema.
Verifying Payments to Distributors
In a cinema and theatre audit program, a team of auditors makes sure that payments match the bills raised by distributors are all accounted for. More so, auditors be certain of the advanced amount paid to the distributors for a film is either adjusted or returned to the cinema owners. On this basis, a report will be forged mentioning either the advanced payment is recoverable or not after verifying the remaining period for the payment.
Verify Parking Payments
The audit examiner is supposed to validate the rate at which parking for each class of vehicle is allocated. Moreover, verifying the collection of parking cash and its confirmation by the parking slips is the duty of a cinema and theatre auditor. In case, if the parking facility is assigned to an independent contractor then the audit examiner is supposed to review the agreement forged between the client and the contractors.
The Bottom Line
The auditor is bound to examine the in-house systems of a cinema, from the evaluation of cinema halls and restaurants to parking space to ensure proper evaluation and to devise a solid strategy for the success of the business.