Not As Easy As ABC When Papers Hire Auditors

By: Jennifer Saba

With publishers turning their own screws on compliance, many are going straight to the source. Nearly a dozen auditors who once worked for ABC jumped sides to newspapers in the last five years. Is it a possible conflict of interest? That depends on the market. According to ABC rules, if a publisher employs an auditor who worked on that paper’s audit within 12 months, ABC will review the audit at that paper’s expense. And if that newspaper is located in a competitive market, the publisher must pay for the re-audits of the competing papers if requested. The theory is that an auditor has access to internal private records, and when they switch sides to a competing paper, it could pose a problem.

The latest example is Newsday. In May, the paper hired ABC Senior Auditor Sandy Elder as its circulation compliance manager. In 2004, she was awarded ABC’s “employee of the year” for her work on the 2003 and 2004 Newsday audits. Elder was with ABC for nine years, auditing most recently, New York City papers.

Under ABC rules, Newsday will undergo a review of its audit. Neal Lulofs, ABC’s vice president of corporate communications, says it’s not a “start-from-scratch” deal; rather, it’s a comparative review of the documents. ABC would not reveal the cost. He also explained that since Newsday is officially located in Melville, N.Y., on Long Island, the paper does not have to pay for the re-audits of The New York Times, the Daily News or the New York Post ? all based in Manhattan, though ABC notified the papers when Newsday hired Elder.

Yet these papers are fierce competitors. Newsday distributes in Manhattan, and the Times, Post, and Daily News extend to Queens and Long Island. (All three papers declined to discuss Elder’s new position.) ABC would not comment on whether the organization had received any complaints from the Times, Post, and Daily News arguing that Newsday is indeed on their turf.

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