N.Y. Racing, Pari-Mutuel Wagering and Breeding Law § 240: Yearly audit

§ 240. Yearly audit. 1. The franchised corporation shall, at its own

expense, cause its annual financial statements to be audited in

accordance with generally accepted auditing standards by a qualified

independent certified public accountant approved by the franchise

oversight board. The annual financial statements shall be prepared on a

comparative basis for the current and prior fiscal year and shall

present the financial position and results of operations in conformity

with generally accepted accounting principles. Three manually-signed

copies of the audited financial statements, together with the report

thereon of the franchised corporation's independent certified public

accountant shall be filed: one with the franchise oversight board, one

with such franchised corporation and one with the office of the attorney

general, not later than ninety days following the end of the fiscal

year. All such annual financial statements and yearly audits shall be

subject to audit by the state comptroller and shall be public records.

2. The franchised corporation shall require the independent certified

public accountant to render the following additional reports:

a. a report on material weakness in accounting, internal controls, and

business and management practices discovered in the ordinary course of

preparing such audited financial statements. Whenever in the opinion of

the independent certified public accountant there exists no material

weaknesses in accounting, internal controls and business and management

practices, no report shall be required; and

b. a report expressing the opinion of the independent certified public

accountant that based on his or her examination of the financial

statements the franchised corporation has followed, in all material

respects, during the period covered by his or her examination, the

system of accounting and internal control as filed with the franchise

oversight board. Whenever in the opinion of the independent certified

public accountant the franchised corporation has deviated from the

system of accounting and internal controls filed with the franchise

oversight board or the accounts, records, and control procedures

examined are not maintained by the franchised corporation in accordance

with generally accepted accounting standards the report shall enumerate

such deviations. The independent certified public accountant shall also

report on areas of the system no longer considered effective, and shall

make recommendations in writing regarding improvements in the system of

accounting and internal controls.

3. If the independent certified public accountant who was previously

engaged to audit the franchised corporation's financial statements

resigns or is dismissed as the franchised corporation's auditor, or

another independent certified public accountant is engaged as auditor,

the franchised corporation shall file a report with the franchise

oversight board within ten days following the end of the month in which

such event occurs, setting forth the following:

a. the date of such resignation, dismissal, or engagement;

b. whether in connection with the audits of the two most recent years

preceding such resignation, dismissal, or engagement there were any

disagreements with the former accountant on any matter of accounting

principles or practices, financial statement disclosure, or auditing

scope or procedure, which disagreements if not resolved to the

satisfaction of the former accountant would have caused such accountant

to make reference in connection with such accountant's report to the

subject matter of the disagreement; including a description of each such

disagreement. The disagreements to be reported include those resolved

and those not resolved; and

c. whether the former accountant's report on the financial statements

for any of the past two years contained an adverse opinion or disclaimer

of opinion or was qualified. The nature of such adverse opinion,

disclaimer of opinion, or qualification shall be described.

4. Upon direction of the franchise oversight board, the franchised

corporation shall, at its own expense, cause its business and managerial

practices to be audited.