Section 139.07 - Annual Audit and Other Reports(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.Adopted by Mass Register Issue 1293, eff. 8/14/2015.Amended by Mass Register Issue 1343, eff. 7/14/2017.