Audit and Non-Audit Services Pre-Approval Policy
Purpose of the Policy
The Audit and Compliance Committee must pre-approve the audit and non-audit services performed by the independent auditor in order to ensure that the provision of such services does not impair the auditor's independence.
Audit Services subject to pre-approval
Audit services are professional services rendered for the audit of the financial statements of New York University (“University”), the review of quarterly financial statements, services that are normally provided by an accountant in connection with statutory and regulatory filings or engagements, and services that generally only the independent auditor reasonably can provide. Audit services include the annual financial statement audit (including related interim reviews as appropriate), annual audit on compliance under OMB Uniform Guidance, annual ERISA audits of the University benefit plans, annual audits of subsidiary activities, attestation services related to NCAA rules, any other audit and attestation engagements required to be completed by the University, and other procedures required to be performed by the independent auditor to be able to form an opinion on the reports previously mentioned. Audit services also include the attestation engagement for the independent auditor’s report on management’s assertion on internal controls for financial reporting. The Audit and Compliance Committee will monitor the audit services engagement throughout the year and related fees and will also approve, if necessary, any changes in terms and conditions resulting from changes in audit scope, University structure or other items.
Audit-related services, including internal control-related services, are assurance and related services that are reasonably related to the performance of the audit or review of the University's financial statements and/or the University's internal control over financial reporting and that are traditionally performed by the independent auditor.
Tax services include tax compliance, tax advice and tax planning services, expatriate tax services and executive tax services.
Other services include permitted products and services other than those in the above three categories, including permitted corporate finance services, and certain advisory services such as real estate, treasury, employee benefit plans and risk management. The Audit and Compliance Committee shall periodically seek relevant guidance to determine the precise definitions of permitted other services, as well as prohibited services that may impair the auditor’s independence. Sources of guidance may include the rules and regulations of the United States Security Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB), as well as the standards set by the U.S. General Accounting Office (GAO) and the American Institute of Certified Public Accountants (AICPA).
Audit and Compliance Committee Policy
Pre-approval of Audit Services
Before the University or any of its affiliates engage an independent auditor to render an audit, audit related, tax, or other service, the engagement should be reviewed with the University's Chief Financial Officer or their delegate and must be either:
1. specifically approved by the Audit and Compliance Committee;or
2. entered into pursuant to this Pre-approval Policy.
The Audit and Compliance Committee shall review and discuss with the independent auditor any documentation supplied by the auditor as to the nature and scope of any tax and other services to be approved, as well as the potential effects of the provision of such services on the auditor's independence.
The Audit and Compliance Committee may delegate pre-approval authority to one or more of its members. The member or members to whom such authority is delegated shall report any pre-approval decisions to the Audit and Compliance Committee at its next scheduled meeting. The Audit and Compliance Committee may not delegate to management the Audit and Compliance Committee's responsibilities to preapprove services performed by the independent auditor.
The Audit and Compliance Committee must specifically pre-approve the terms of the annual audit services engagement. The Audit and Compliance Committee shall approve, if necessary, any changes in terms resulting from changes in audit scope, University structure or other matters.
In addition to the annual audit services engagement approved by the Audit and Compliance Committee, the Audit and Compliance Committee may grant pre-approval for other audit services, which are those services that only the independent auditor reasonably can provide.
Audit Related Services
The Audit and Compliance Committee believes that the provision of audit-related services does not impair the independence of the auditor, and may pre-approve audit-related services on an annual basis.
The Audit and Compliance Committee believes that the independent auditor can provide tax services to the University without impairing the auditor's independence. However, the Audit and Compliance Committee shall scrutinize carefully the retention of the independent auditor in connection with any tax-related transaction initially recommended by the independent auditor.
The Audit and Compliance Committee may grant pre-approval to those permissible non-audit services classified as other services that it believes would not impair the independence of the auditor, including those that are routine and recurring services.
Pre-Approval Fee Levels
The Audit and Compliance Committee may consider the amount or range of estimated fees as a factor in determining whether a proposed service would impair the auditor's independence. Where the Audit and Compliance Committee has approved an estimated fee for a service, the pre-approval applies to all services described in the approval. However, in the event the invoice in respect of any such service is materially in excess of the estimated amount or range, the Audit and Compliance Committee must approve such excess amount prior to payment of the invoice. The Audit and Compliance Committee expects that any requests to pay invoices in excess of the estimated amounts will include an explanation as to the reason for the overage. The University’s independent auditor will be informed of this policy.
With respect to each proposed pre-approved service, the independent auditor must provide the Audit and Compliance Committee with detailed back-up documentation regarding the specific services to be provided.
The University's management shall inform the Audit and Compliance Committee of each service performed by the independent auditor pursuant to this Pre-Approval Policy. Requests or applications to provide services that require separate approval by the Audit and Compliance Committee shall be submitted to the Audit and Compliance Committee by both the independent auditor and the Senior Vice President for Finance and Budget. Requests must include a joint statement as to whether, in their view, the request or application is consistent with the rules of relevant accounting standard setting organizations on auditor independence.
About This Policy
Effective Date Supersedes 09/17/07 Issuing Authority Audit and Compliance Committee of the Board of Trustees Responsible Officer Audit and Compliance Committee of the Board of Trustees