Employing Members of the Independent External Auditor

New York University (“the University”) maintains the integrity of its financial statements, financial reporting processes, and internal controls by engaging the services of an independent external auditor (“the auditor”). To ensure the auditor is truly independent and is capable of exercising objective and impartial judgment on all issues encompassed within the auditor’s engagement, the University places carefully considered limitations on the hiring of current or former employees of its auditor as provided in this Policy.

The Audit Engagement Team includes all partners and professional employees who participate in an audit, review or attestation engagement of the University, including all persons who consult with the audit engagement team during the audit, review or attestation engagement regarding technical or industry-specific issues, transactions or events, and the immediate family members of any such person as defined by the AICPA Code of Professional Conduct.

University Policy

The University establishes the following guidelines for hiring employees or former employees of the independent external auditor including former members of the Audit Engagement Team.

1. . The University shall not hire the current or former engagement, concurring or relationship partner of its auditor or their immediate family member as defined by the AICPA Code of Professional Conduct for a role responsible for significant accounting functions that support material components of the financial statements, primary responsibility for the preparation of the financial statements, or the ability to exercise influence over the contents of the financial statements until at least two years have passed since the issuance of financial statements with respect to the audit engagement with which such partner was involved.

2. The prohibition contained in paragraph 1 of this Policy shall not apply to any individual who is hired by the University for a position other than a role as described in paragraph 1.

3. The University is permitted to hire members of the independent external auditor or their immediate family members as defined by the AICPA Code of Conduct other than those referenced in paragraph 1 above; provided that to the extent these individuals were former members of the Audit Engagement Team, a management shall make a determination to the extent of that individual’s involvement in the financial close process and audit cycle, and whether any additional safeguards should be implemented to ensure independence from the Audit Engagement Team.

4. The University’s management will periodically advise the Audit and Compliance Committee of any members of the Audit Engagement Team hired by the University as permitted under these guidelines.

5. 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 and Compliance Committee is aware of the prior employment relationship; or

b. Any other exemptions require approval by the Audit and Compliance Committee.

6. These guidelines are effective for employment relations with the University that commence on and after June 6, 2023.


Notes
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  1. Dates of official enactment and amendments: Oct 1, 2007
  2. History: Adopted by the Audit and Compliance Committee on October 1, 2007; amended on June 6, 2023.
  3. Cross References: N/A