Sec. 36.07.04.06. Annual Audit

A. A facility operator who operates more than ten instant bingo machines shall cause its annual financial statements to be audited in accordance with generally accepted auditing standards by an independent certified public accountant.

B. The annual financial statement shall include the method of calculation and a statement of the gross receipts subject to the admissions and amusement tax.

C. The annual financial statements shall be prepared on a comparative basis for the current and prior fiscal year and present financial position and results of operations in conformity with generally accepted accounting principles in the United States.

D. The audited financial statements shall include a footnote reconciling and explaining any difference between the financial statements included in any report submitted to the Commission under Regulation .05 of this chapter and the audited financial statements.

E. With regard to adjustments resulting from the annual audit. a facility operator shall:

(1) Disclose to the Commission all adjustments, whether or not recorded in the accounting records; and

(2) Record the adjustment in the accounting records of the year to which the adjustment relates.

F. Not later than 120 days after the end of its fiscal year, a facility operator shall submit to the Commission:

(1) A copy of its audited financial statements; and

(2) Any management letter or report prepared with regard to the financial statements by its independent certified public accountant.

G. A facility operator shall prepare a written response to the reports required by §E of this regulation which includes details as to any corrective action taken.

H. A facility operator shall submit a written report to the Commission if an independent certified public accountant who is engaged as the principal accountant to audit its financial statements:

(1) Resigns;

(2) Is dismissed as the facility operator’s principal accountant; or

(3) Is replaced by another independent certified public accountant as principal accountant.

I. A report that is required to be filed under §G of this regulation shall include:

(1) The date of the resignation, dismissal, or new engagement;

(2) Whether in connection with the audits of the 2 most recent years preceding a resignation, dismissal or new engagement there were any disagreements, resolved or unresolved, with the former accountant on:

(a) Accounting principles or practices;

(b) Financial statement disclosure; or

(c) Auditing scope or procedure;

(3) The nature of any disagreement disclosed in §H(2) of this regulation;

(4) Whether the principal accountant's report on the financial statements for either of the past two years contained an adverse opinion, disclaimer of opinion or was qualified;

(5) The nature of any adverse opinion, disclaimer of opinion or qualification; and

(6) A letter from the former principal accountant addressed to the Commission stating whether the principal accountant concurs with the statements made by the facility operator in the report to the Commission submitted under this section.

J. A report required to be filed under §G of this regulation shall be submitted to the Commission not later than 10 days after the end of the month in which the resignation, dismissal or new engagement occurred.