Policy Name: Appointment of Independent Auditors and Conduct of Independent Audit
Responsibility for Maintenance: Office of the President; Financial Services
I. Policy Statement
The Independent Auditor of the College must be appointed in accordance with the procedures set forth in this policy. The policy also sets forth the respective roles of the Board of Trustees, the Finance, Audit and Compliance Committee and the Administration in connection with the conduct of the audit.
II. Reason for Policy
New York State law requires that community college records and accounts be audited annually by an independent certified public accounting firm. This policy establishes requirements for appointment of the College’s Independent Auditors and the conduct of the audit.
III. Applicability of the Policy
Members of the Board of Trustees, Finance, Audit, and Compliance Committee members, as well as College officers and employees responsible for finance and audit functions, should familiarize themselves with this policy.
IV. Related Documents
New York State Education Department regulations: 8 NYCRR Part 602.1 (c).
| Subject || Office Name || Title or Position || Telephone Number || Email/URL |
| || Financial Services ||Senior Vice President and Chief Financial Officer || (315) 498-2268 || firstname.lastname@example.org |
| Term || Definition |
|Finance, Audit and Compliance Committee || The Finance, Audit and Compliance Committee of the Board of Trustees, as it may be duly constituted from time to time. |
| Independent Auditor || The independent certified public accounting firm selected by the Finance, Audit and Compliance Committee and approved by the Board of Trustees to conduct the College’s annual audit, in accordance with this Policy |
Appointment of Independent Auditor
The Finance, Audit and Compliance Committee will request proposals from qualified certified public accounting firms to audit the accounts and records of the College. All proposals that are received will be reviewed by the Finance, Audit and Compliance Committee with the assistance of the Senior Vice President and Chief Financial Officer and other members of the College administration as deemed necessary or appropriate. In reviewing proposals, the Finance, Audit and Compliance Committee shall consider, among other things, the qualifications, performance and independence of prospective auditors (including considering whether the prospective auditors’ quality controls are adequate and whether any provision of non-audit services to the College is compatible with maintaining each prospective auditor’s independence), taking into account the opinions of the Senior Vice President and Chief Financial Officer and other members of the administration.
The Finance, Audit and Compliance Committee will recommend appointment of its selected audit firm to the full Board of Trustees, and the Board will be responsible for authorizing the appointment of the audit firm as the College’s Independent Auditor for a specific duration to be determined by the Board. In the event the Board does not approve the Finance, Audit and Compliance Committee’s recommended firm, the Finance, Audit and Compliance Committee may either (a) recommend a different firm from among those which had submitted proposals, or (b) re-solicit proposals.
The Independent Auditor shall serve at the pleasure of the Board, may be discharged by the Board at any time, and shall be discharged by the Board upon recommendation of the Finance, Audit and Compliance Committee.
Conduct of Audit
The Finance, Audit and Compliance Committee shall be responsible directly for the oversight of the work of the Independent Auditor during the conduct of the audit (including resolution of disagreements between the administration and the Independent Auditor regarding financial reporting). The Independent Auditor shall report directly to the Finance, Audit and Compliance Committee.
The Senior Vice President and Chief Financial Officer and other members of the administration as deemed necessary or appropriate shall work with the Independent Auditor, under the oversight of the Finance, Audit and Compliance Committee, to plan the scope, staffing and conduct of the audit and to determine that the College’s financial statements and disclosures are complete and accurate in accordance with applicable accounting principles, conventions, laws, rules and regulations consistently applied and fairly present, in all material respects, the financial condition of the College. The Finance, Audit and Compliance Committee’s oversight role shall include, without limitation, a review and discussion with the administration and the Independent Auditor of:
- Significant financial reporting issues and judgments made in connection with the preparation of the College’s financial statements;
- The clarity of the financial disclosures made by the College;
- The development, selection and disclosure of critical accounting assumptions or estimates, the analyses of alternative assumptions or estimates, and the effect of such estimates on the College’s financial statements;
- Potential changes in applicable accounting conventions and the effect such changes would have on the College’s financial statements;
- Significant changes in accounting principles, financial reporting policies and internal controls implemented by the College;
- Significant litigation, contingencies and claims against the College and material accounting issues that require disclosure in the College’s financial statements;
- Information regarding any “second” opinions sought by the administration from the Independent Auditor with respect to the accounting treatment of a particular event or transaction;
- The administration’s compliance with the College’s processes, procedures and internal controls;
- The adequacy and effectiveness of the College’s internal accounting and financial controls and the recommendations of the administration and the Independent Auditor for the improvement of accounting practices and internal controls;
- Any difficulties encountered by the Independent Auditor in the course of the audit, including any restrictions on the scope of activities or access to requested information, and any significant disagreements with the administration; and
- Any material written communications between the Independent Auditor and the administration, such as any management letter or schedule of unadjusted differences.
Approved by OCC Board of Trustees April 3, 2006