When not correctly managed and reported, the risk of state audits – and subsequent fines and penalties for inadequate unclaimed property compliance – become a distinct reality. There is a widely held belief, however, that the overwhelming majority of unclaimed property is not reported. In fact, most state estimates suggest that only 15-35 percent of companies are in full compliance with the laws.
The bottom line is that if unclaimed property isn’t on your radar, it should be.
In a recent a Corporate Compliance Insights titled article, Unclaimed Property Compliance: A Top Line Issue in Your Organization, Debbie Zumoff, Chief Compliance Officer at Keane Unclaimed Property, outlines some of the proactive steps businesses can take to set up a compliance process within their organization. The steps range from understanding why unclaimed property is being generated and defining liabilities within the company to reconciling accounts to prevent overpayment and documenting an annual compliance roadmap.
By creating a best practice approach to unclaimed property compliance, organizations will be better able to understand and manage the unclaimed property reporting process. Even more so, companies will build their reputation by showing that they demonstrate strong internal controls, which in turn will allow them to protect key stakeholder relationships and maintain goodwill with the states.
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