Purpose of the Policy

The Audit and Compliance Committee must pre-approve the audit and non-audit services performed by New York University’s independent external auditor in order to ensure that the provision of such services does not impair the auditor's independence.

Policy Definitions

Audit Services subject to pre-approval

Audit services are professional services rendered for the audit of the financial statements of New York University (“University”), the review of quarterly financial statements, services that are normally provided by an accountant in connection with statutory and regulatory filings or engagements, and services that generally only the independent external auditor reasonably can provide. Audit services performed by the University’s independent external auditor include the annual financial statement audit (including related interim reviews as appropriate), annual audit on compliance under OMB Uniform Guidance, annual ERISA audits of the University benefit plans, annual audits of subsidiary activities, any other audit and attestation engagements required to be completed by the University, and other procedures required to be performed by the independent external auditor to be able to form an opinion on the reports previously mentioned. The Audit and Compliance Committee will monitor the audit services engagement throughout the year and related fees and will also approve, if necessary, any changes in terms and conditions resulting from changes in audit scope, University structure or other items.

Audit-Related Services

Audit-related services are professional services including reviews of internal controls; due diligence for mergers and acquisitions; due diligence for the issuance of debt; consulting on new accounting standards; agreed upon or other attestation procedures that are reasonably related to the performance of the audit or review of the University's financial statements.

Tax Services

Tax services include tax compliance, tax advice and tax planning services, expatriate tax services and executive tax services.

Other Services

Other advisory services include permitted services other than those identified above, including permitted corporate finance services, and certain advisory services such as real estate, treasury, employee benefit plans and risk management. The Audit and Compliance Committee shall periodically seek relevant guidance to determine the precise definitions of permitted other services, as well as prohibited services that may impair the external auditor’s independence. Sources of guidance may include the rules and regulations of the United States Security Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB), as well as the standards set by the U.S. General Accounting Office (GAO) and the American Institute of Certified Public Accountants (AICPA).

Audit and Compliance Committee Policy

Pre-approval of Audit Services

Before the University or any of its affiliates engage the University’s independent external auditor to render an audit, audit-related service, tax, or other advisory service, the engagement must be reviewed with the University's Chief Financial Officer or their delegate and must be either: 

1. specifically pre-approved on a case-by-case basis by the Audit and Compliance Committee (“specific pre-approval”); or

2. pre-approved pursuant to provisions of this Pre-approval Policy set forth below (“policy-based pre-approval”).

The Audit and Compliance Committee shall review and discuss with the independent external auditor any documentation supplied by the auditor as to the nature and scope of any tax and other advisory services to be approved, as well as the potential effects of the provision of such services on the auditor's independence.

Delegation

The Audit and Compliance Committee hereby delegates to its Chair the authority to grant specific pre-approval in accordance with this Policy.  The Audit and Compliance 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 and Compliance Committee at its next scheduled meeting. The Audit and Compliance Committee may not delegate to management the Audit and Compliance Committee's responsibilities to pre-approve services performed by the independent external auditor.

Audit Services

The Audit and Compliance Committee must specifically pre-approve the terms of the annual audit services engagement. The Audit and Compliance 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 and Compliance Committee, the Audit and Compliance Committee may grant specific pre-approval for other audit services, which are those services that only the independent external auditor reasonably can provide.

Audit-Related Services

The Audit and Compliance Committee believes that the provision of audit-related services does not impair the independence of the auditor. Accordingly, the Audit and Compliance Committee has granted policy-based approval for audit-related services up to $250,000 (which total shall apply to multi-phased services), up to an aggregate of $500,000 per fiscal year.  Any other audit-related services must be specifically pre-approved by the Audit and Compliance Committee.

Tax Services

The Audit and Compliance Committee believes that the independent external auditor can provide tax services to the University without impairing the auditor's independence. However, the Audit and Compliance Committee shall scrutinize carefully the retention of the independent external auditor in connection with any tax-related transaction initially recommended by the independent auditor.  Any such tax services shall be specifically pre-approved by the Audit and Compliance Committee.

Other Advisory Services

The Audit and Compliance Committee may grant pre-approval to those permissible non-audit services classified as other advisory services that it believes would not impair the independence of the auditor, including those that are routine and recurring services. Accordingly, the Audit and Compliance Committee has granted policy-based approval for other advisory services up to $250,000 (which total shall apply to multi-phased services), up to an aggregate of $500,000 per fiscal year.  Any other advisory services must be specifically pre-approved by the Audit and Compliance Committee.

Pre-Approval Fee Levels

The Audit and Compliance 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 and Compliance 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 and Compliance Committee must approve such excess amount prior to payment of the invoice. The Audit and Compliance 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 external auditor will be informed of this policy.

Supporting Documentation

With respect to each proposed pre-approved service, the independent external auditor must provide the Audit and Compliance Committee with detailed documentation supporting the specific services to be provided.

Procedures

The University's management shall inform the Audit and Compliance Committee of each service performed by the independent external auditor pursuant to the policy-based pre-approval under this Pre-Approval Policy. Requests or applications to provide services that require specific approval by the Audit and Compliance Committee shall be submitted to the Audit and Compliance Committee by the Senior Vice President for Finance and Budget or their delegate and must include a joint statement with the independent external auditor as to whether, in their view, the request or application is consistent with the rules of relevant accounting standard setting organizations on auditor independence.


Notes
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  1. Dates of official enactment and amendments: Sep 17, 2007
  2. History: Adopted by the Audit and Compliance Committee on September 17, 2007; amended on June 8, 2021, and June 6, 2023.
  3. Cross References: None