Employing Members of the Independent External Auditor
New York University (“University”) maintains the integrity of its financialstatements, financial reporting processes, and internal controls by engaging the services of anindependent external auditor (“auditor”). To ensure the auditor is truly independent and iscapable of exercising objective and impartial judgment on all issues encompassed within theauditor’s engagement, the University places carefully considered limitations on the hiring ofcurrent or former employees of its auditor in any financial reporting oversight role at theUniversity, as provided in this Policy.
The University establishes the following guidelines for hiring employees or former employees of the auditor.
1. University shall not hire any employee or former employee of its auditor for a position with the University in a financial reporting oversight role if such employee or former employee was the lead or concurring partner, or any other member of the audit engagement team who provided more than ten hours of audit, review, or attestation services for the University during the 1-year period preceding the date of the initiation of the audit.
2. The prohibition contained in paragraph 1 of this Policy shall not apply if an employee or former employee of the independent auditor did not work on the University’s audit, review or attestation engagement for more than ten hours, except for the lead or concurring partner, or is hired by the University for a position other than a position involving financial reporting oversight role.
3. The audit engagement team includes all partners and professional employees who
participate in an audit, review or attestation engagement of the University, including audit partners and all persons who consult with others on the audit engagement team during the audit, review or attestation engagement regarding technical or industry-specific issues, transactions or events.
4. For purposes hereof, audit procedures are deemed to have commenced for the current audit engagement period the day after the prior year’s periodic annual report is published. The audit engagement period for the current year is deemed to conclude the day the current year’s periodic annual report is published.
5. The University’s management will periodically advise the Audit Committee of any partners or professional employees of the independent auditor hired by the University as permitted under these guidelines.
6. The following exemptions shall apply to these hiring guidelines:
a. Individuals employed by the University as a result of a business combination between an entity that is also an audit client of the independent auditor and the University, provided employment was not in contemplation of the business combination and the Audit Committee is aware of the prior employment relationship; or
b. Individuals employed by the University due to an emergency or other unusual circumstance, provided that the Audit Committee determines that the relationship is in the interest of the University.
7. These guidelines are effective for employment relations with the University that commence on and after October 1, 2007.