N.Y. Not-for-Profit Corporation Law § 712-a: Audit oversight

§ 712-a. Audit oversight.

(a) The board, or a designated audit committee of the board comprised

solely of independent directors, of any corporation required to file an

independent certified public accountant's audit report with the attorney

general pursuant to subdivision one of section one hundred seventy-two-b

of the executive law shall oversee the accounting and financial

reporting processes of the corporation and the audit of the

corporation's financial statements. The board or designated audit

committee shall annually retain or renew the retention of an independent

auditor to conduct the audit and, upon completion thereof, review the

results of the audit and any related management letter with the

independent auditor.

(b) The board, or a designated audit committee of the board comprised

solely of independent directors, of any corporation required to file an

independent certified public accountant's audit report with the attorney

general pursuant to subdivision one of section one hundred seventy-two-b

of the executive law and that in the prior fiscal year had or in the

current fiscal year reasonably expects to have annual revenue in excess

of one million dollars shall, in addition to those duties set forth in

paragraph (a) of this section:

(1) review with the independent auditor the scope and planning of the

audit prior to the audit's commencement;

(2) upon completion of the audit, review and discuss with the

independent auditor: (A) any material risks and weaknesses in internal

controls identified by the auditor; (B) any restrictions on the scope of

the auditor's activities or access to requested information; (C) any

significant disagreements between the auditor and management; and (D)

the adequacy of the corporation's accounting and financial reporting

processes;

(3) annually consider the performance and independence of the

independent auditor; and

(4) if the duties required by this section are performed by an audit

committee, report on the committee's activities to the board.

(d) If a corporation controls a group of corporations, the board or

designated audit committee of the board of the controlling corporation

may perform the duties required by this section for one or more of the

controlled corporations and, if independent directors, directors from

one or more of such controlled corporations may serve on any designated

audit committee of the board of such controlling corporation, and

perform the duties required by this section for each corporation and any

controlled corporations.

(e) Only independent directors may participate in any board or

committee deliberations or voting relating to matters set forth in this

section, provided that nothing in this paragraph shall prohibit the

board or designated audit committee from requesting that a person with

an interest in the matter present information as background or answer

questions at a committee or board meeting prior to the commencement of

deliberations or voting relating thereto.

(f) Any corporation that is a state authority or a local authority as

defined in section two of the public authorities law and that has

complied substantially with sections twenty-eight hundred two and

twenty-eight hundred twenty-four of such law shall be deemed in

compliance with this section.