What's an audit clause, and why is it important?
An audits rights clause looks like this:
Author shall have the right, upon reasonable notice and during usual business hours but not more than once each year, to engage a certified public accountant to examine the books and records of Publisher relating to the Work at the place where such records are regularly maintained.
This means that if you think you're not getting paid correctly your CPA can go in and audit the publisher's books.
There is a company here in NYC whose sole purpose is auditing royalty statements. They don't charge you any money, they take a percentage of what they earn for you in mis-paid royalties. They've been doing quite nicely for a number of years, which says a lot about royalty accounting.
An audit clause is important because without it you have to sue to get to the books, and while publishers will probably let you at them if they aren't trying to cheat you on purpose, you definatly want it spelled out that you have the RIGHT to look at them without resorting to litigation.
The language on this clause is drawn from Kirsh's Guide to the Book Contract, a tattered copy of which is in every single agent's office in the world I think.