§ 712-A — Audit oversight

§ 712-a. Audit oversight.\n (a) The board, or a designated audit committee of the board comprised\nsolely of independent directors, of any corporation required to file an\nindependent certified public accountant's audit report with the attorney\ngeneral pursuant to subdivision one of section one hundred seventy-two-b\nof the executive law shall oversee the accounting and financial\nreporting processes of the corporation and the audit of the\ncorporation's financial statements. The board or designated audit\ncommittee shall annually retain or renew the retention of an independent\nauditor to conduct the audit and, upon completion thereof, review the\nresults of the audit and any related management letter with the\nindependent auditor.\n (b) The board, or a designated audit committee of the board comprised\nsolely of independent directors, of any corporation required to file an\nindependent certified public accountant's audit report with the attorney\ngeneral pursuant to subdivision one of section one hundred seventy-two-b\nof the executive law and that in the prior fiscal year had or in the\ncurrent fiscal year reasonably expects to have annual revenue in excess\nof one million dollars shall, in addition to those duties set forth in\nparagraph (a) of this section:\n (1) review with the independent auditor the scope and planning of the\naudit prior to the audit's commencement;\n (2) upon completion of the audit, review and discuss with the\nindependent auditor: (A) any material risks and weaknesses in internal\ncontrols identified by the auditor; (B) any restrictions on the scope of\nthe auditor's activities or access to requested information; (C) any\nsignificant disagreements between the auditor and management; and (D)\nthe adequacy of the corporation's accounting and financial reporting\nprocesses;\n (3) annually consider the performance and independence of the\nindependent auditor; and\n (4) if the duties required by this section are performed by an audit\ncommittee, report on the committee's activities to the board.\n (d) If a corporation controls a group of corporations, the board or\ndesignated audit committee of the board of the controlling corporation\nmay perform the duties required by this section for one or more of the\ncontrolled corporations and, if independent directors, directors from\none or more of such controlled corporations may serve on any designated\naudit committee of the board of such controlling corporation, and\nperform the duties required by this section for each corporation and any\ncontrolled corporations.\n (e) Only independent directors may participate in any board or\ncommittee deliberations or voting relating to matters set forth in this\nsection, provided that nothing in this paragraph shall prohibit the\nboard or designated audit committee from requesting that a person with\nan interest in the matter present information as background or answer\nquestions at a committee or board meeting prior to the commencement of\ndeliberations or voting relating thereto.\n (f) Any corporation that is a state authority or a local authority as\ndefined in section two of the public authorities law and that has\ncomplied substantially with sections twenty-eight hundred two and\ntwenty-eight hundred twenty-four of such law shall be deemed in\ncompliance with this section.\n