Audit and Non-Audit Services Pre-Approval Policy
Purpose of this Policy
The Audit 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.
Scope of this Policy
This Policy applies to all audit and non-audit services performed by the independent auditor.
Procedures for Implementation
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 must be either:
1. specifically approved by the Audit Committee;or
2. entered into pursuant to this Pre-approval Policy.
The Audit 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 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 Committee at its next scheduled meeting. The Audit Committee may not delegate to management the Audit Committee's responsibilities to preapprove services performed by the independent auditor.
The Audit Committee must specifically pre-approve the terms of the annual audit services engagement. The Audit 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 Committee, the Audit 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 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 Committee believes that the independent auditor can provide tax services to the University without impairing the auditor's independence. However, the Audit 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 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 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 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 Committee must approve such excess amount prior to payment of the invoice. The Audit 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 Committee with detailed back-up documentation regarding the specific services to be provided.
The University's management shall inform the Audit 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 Committee shall be submitted to the Audit 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.
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1. Dates of official enactment and amendments: Adopted by the Audit Committee on September 17, 2007
3. Cross References: