N.Y. Comp. Codes R. & Regs. tit. 9 § 5605.1

Current through Register Vol. 46, No. 53, December 31, 2024

Section 5605.1 - Audited financial statements

(a)Annual audit requirement. A registrant, unless specifically exempted by the commission in writing, shall, at such registrant's own expense, cause such registrant's annual financial statements to be audited in accordance with generally accepted auditing standards by an independent certified public accountant licensed to practice.

(b)Requirements for audited statements. The annual financial statements required by subdivision (a) of this section shall be prepared on a comparative basis for a registrant's current and prior standard financial year. Such statements shall present financial position and results of operations in conformity with generally accepted accounting principles.

(c)Other financial information. The commission may require other financial information, in a format the commission prescribes, to be included as supplementary information in relation to the audited financial statements as a whole. Such information shall be subjected to auditing procedures as required by generally accepted auditing standards and include the independent auditors' report on such supplementary information.

(d)Filing with commission. A copy of a registrant's audited financial statements, together with the report thereon of the registrant's independent certified public accountant, shall be filed with the commission within 10 business days of the completion of the annual independent audit of the registrant's financial statements.

(e)Management letter. In addition to a registrant's audited financial statements, each registrant shall submit a copy of the management letter prepared by the independent certified public accountant that lists any internal control or operational weaknesses noted during the financial statement audit and recommendations for improvement. The registrant shall prepare a response to the issues outlined in the management letter that describes any corrective actions taken or planned to be taken and include a copy of this response with such registrant's submission to the commission.

(f)Additional requirements. In addition to the management letter, the commission may require a registrant to engage an independent certified public accountant approved by the commission to perform an additional review of internal controls for the operation of interactive fantasy sports, cause such registrant's business and managerial practices to be audited and review specified expenditures that conform to specifications the commission prescribes. The commission shall notify a registrant of the type of report required, the scope of such report and the frequency with which such report should be performed. This review shall be performed at the expense of the registrant unless the commission determines otherwise. A registrant shall respond to recommendations in such report, noting any corrective actions taken or planned to be taken. A registrant shall submit to the commission two copies of such report, including the required response to the commission, within 120 days following the end of the periods covered by such report, unless the Commission instructs otherwise.

(g)Publicly held registrant. If a registrant, or any of its affiliates, is publicly held, such registrant or the affiliate shall make available and provide written notice to the commission any report. Such reports include, without limitation, forms S-1, 8-K, 10-Q, 10-K, proxy or information statements and all registration statements required to be filed by such licensee or affiliates with the United States Securities and Exchange Commission or other domestic or foreign securities regulatory agency, at the time of filing with the such agency.

(h)Resignation or dismissal of accountant. If an independent certified public accountant who was previously engaged as the principal accountant to audit a registrant's financial statements resigns or is dismissed as such registrant's principal accountant, or another independent certified public accountant is engaged as principal accountant, then:

(1) such registrant shall file a report with the commission within 10 days following the end of the month in which such event occurs, setting forth the following:

(i) the date of such resignation, dismissal, or engagement;

(ii) whether in connection with the audits of the two most recent years preceding such resignation, dismissal or engagement there were any disagreements with the former accountant on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements if not resolved to the satisfaction of the former accountant would have caused such accountant to make reference in connection with such accountant's report to the subject matter of disagreement, including a description of each such disagreement. The disagreements to be reported shall include those resolved and those not resolved; and

(iii) whether the principal accountant's report on the financial statements for any of the past two years contained an adverse opinion or disclaimer of opinion or was qualified. The nature of such adverse opinion, disclaimer of opinion or qualification shall be described; and

(2) such registrant shall request the former accountant to furnish to the registrant a letter addressed to the commission stating whether that accountant agrees with the statements made by the registrant in regard to the requirements of subparagraph (ii) of paragraph (1) of this subdivision.

(i)Additional audit. The commission shall have the authority to conduct, or to have conducted at a registrant's expense, an audit or review of any of such registrant's financial controls and records.

N.Y. Comp. Codes R. & Regs. Tit. 9 § 5605.1

Adopted New York State Register October 18, 2023/Volume XLV, Issue 42, eff. 10/18/2023