(1) On an annual
basis a gaming licensee shall, at its own expense, cause an audit to be
prepared by an independent certified public accountant of its financial
statements relevant to the operation of its Massachusetts gaming establishment.
The gaming licensee may satisfy this requirement by submission of the audit of
the consolidated financial statement, including applicable notes, of the gaming
licensee's holding company or intermediary company provided that such audit is
accompanied by a supplemental information, appendix, or other financial
information section specific to the gaming licensee which includes an audited
financial statement containing, at a minimum, a balance sheet, income
statement, and a statement of cash flows for the gaming licensee. In either
event, the independent certified public accountant shall attest to the
financial condition of the gaming licensee, disclose whether the accounts,
records and control procedures examined are maintained by the gaming licensee
as required by M.G.L. c. 23K and 205 CMR, and opine as to whether there are
material weaknesses in the gaming licensee's system of internal controls.
In the event that the independent certified public accountant
makes recommendations to improve the system of internal controls, or to
increase the gaming licensee's level of compliance, the gaming licensee's Chief
Financial Officer shall respond, in writing, to the recommendations of the
independent certified public accountant and provide the commission with a copy
of its response.
(2) To
ensure the independence of the annual audit, at least every five years a gaming
licensee, whose holding company or intermediary company is not publicly traded,
shall rotate the lead (or coordinating) audit partner having primary
responsibility for the audit, and the audit partner responsible for reviewing
the audit. For a gaming licensee, whose holding company or intermediary company
is publicly traded, lead (or coordinating) audit partner rotation shall comply
with the requirements of federal law, including the requirements of the United
States Securities and Exchange Commission and/or the Public Company Accounting
Oversight Board.
(3) In the event
the annual audited financial statements differ from financial statements
maintained by the gaming licensee throughout the year, the gaming licensee
shall provide a summary of these differences as part of the annual
audit.
(4) The annual audit and
associated statements required in accordance with 205 CMR
139.07(1) shall be
filed with the commission within three months following the end of the quarter
following the end of the gaming licensee's fiscal year.
(5) In cases where a gaming licensee's parent
or holding company is not publicly traded, in the event the gaming licensee's
independent certified public accountant shall resign or be removed as the
gaming licensee's principal accountant or auditor, the gaming licensee shall
submit a written report to the commission within 20 days of such resignation or
removal, signed by its Chief Financial Officer and Chair of its Audit
Committee, outlining the cause or nature of the resignation or removal, stating
whether the resignation or removal was related to material differences between
the parties as to financial statement presentation issues, disclosures, or the
adequacy of the gaming licensee's system of internal accounting control and, if
so, a complete and detailed description of the differences for consideration by
the commission. The gaming licensee shall submit as an exhibit to this report a
letter from the former independent certified public accountant stating whether
he or she agrees with the statements made by the gaming licensee in the report
submitted to the commission.
In cases where a gaming licensee's parent or holding company is
publicly traded, the gaming licensee shall file with the commission copies of
such information and documents as are required to be filed with the United
States Securities and Exchange Commission and/or the Public Company Accounting
Oversight Board upon the resignation or removal of the publicly traded holding
company's independent certified public accountant.
(6) To the extent possible, any adjustments
resulting from the annual audit required in accordance with 205 CMR
139.07
shall be recorded in the accounting records of the year to which the adjustment
relates. In the event the adjustments were not reflected in the gaming
licensee's quarterly report for the fourth quarter and the commission concludes
the adjustments are significant, a revised quarterly report for the fourth
quarter may be required from the gaming licensee. The revised filing shall be
due within 30 calendar days after notification to the gaming licensee, unless
an extension is granted by the commission.
