Responding to a software audit can be an arduous, expensive, and
time-consuming process for a company. The remediation process to
close compliance gaps may vary slightly depending on whether the
audit is initiated the software publisher itself or outsourced to
an agency such as BSA| The Software Alliance ("BSA") or
the Software & Industry Information Association
Because many companies are weary from the time and expense
incurred during the course of the audit, some do not take the
remediation process seriously. The following are tips for
remediation to ensure the post-settlement obligations are met and
the release of liability is secured.
Determine the best license
for each use case. Smaller companies prefer to purchase
original equipment manufactuer ("OEM") licenses for
operating systems and other software on a case-by-case basis.
However, larger corporations may choose to take advantage of bulk
purchases by entering into site or enterprise agreements directly
with the software publisher, which may offers discounts and other
benefits. Regardless of which purchase option a company uses, it is
important to ensure that each license covers the specific use case
for the installed software.
Ensure subscription software
is renewed. Some software publishers are moving to a
subscription licensing model instead of a perpetual license. A
perpetual license grants a user the right to use the software
forever, as long as it is in accordance with the license agreement.
However, a subscription typically must be maintained in order to
continue to use the software. If a company misses a renewal, it may
create a compliance gap if the user continues to install and use
the software. There are very few instances (such as some Microsoft
developer licenses) that allow the software to continue to be used
after the subscription expires, but generally all subscriptions
must be active in order to be compliant with the license
Avoid cutting corners and
purchasing discounted software. A sizeable portion of
software sold on online auction sites is not legitimate. Software
auditors typically assume that all software sold for less than 90%
of its MSRP value is counterfeit or being illegally sold or
transferred. It is important to purchase from reputable, authorized
resellers in order to avoid paying additional penalties in future
audits. Some software publishers offer a list of authorized vendors
on their web sites.
These are just a few issues to consider when completing
post-audit software remediation. It is crucial to properly
remediate any compliance gaps to secure the release of liability
and protect against future audits. If in doubt, contact an attorney
experienced in software licensing and copyright infringement
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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It is unavoidable – public companies must disclose sufficient information to allow an independent accounting firm to perform the financial statement audits necessary for compliance with federal securities laws.
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