(a) The purpose of
the independent audit is to provide assurances to the Commission that the
production expenses or costs set forth in the detailed cost report have in fact
been expended and are otherwise accurate and reasonable.
(b) The audit shall be completed in
accordance with generally accepted auditing standards as established by the
AICPA and FASB and shall be at the sole cost and expense of applicant. The
audit shall be performed by a certified public accountant licensed in this
State, unrelated to the applicant and having no direct or indirect financial
interest in the applicant or the applicant's production.
(c) The auditor's report shall state that the
audit was conducted in accordance with this section and shall include and be
subject to the following requirements:
(1) A
schedule disclosing the applicant's noncompliance with any applicable law,
regulation, provision of contracts or other agreements which could have a
material effect on the costs reported in the detailed cost report;
(2) A schedule disclosing all sources of
funds used by the applicant to finance the production including any non-cash or
barter transactions included in the detailed cost report;
(3) A schedule disclosing all related party
transactions as such are defined, specified and explained by the Financial
Accounting Standards Board (FASB) in Statement No. 57 and which are encompassed
in the detailed cost report to include:
(A)
The name of the related party;
(B)
The nature of the relationship between the related party and the applicant;
and,
(C) A description of the
nature of the transaction and the amount.
(4) The auditor's opinion shall be dated as
of the date that audit fieldwork was completed and shall be addressed to the
applicant;
(5) The auditor shall
have demonstrated knowledge and familiarity with the accounting practices
generally recognized in the film or other media production industry and shall
cooperate fully with the Commission in responding to the Commission's post
audit inquiries and in complying with such audit guidelines applicable to all
such audits as the Commission may prescribe in writing; and,
(6) The audit work papers must be maintained
by the auditor for a period of six (6) years from the date that the audit was
submitted to the Commission and shall be made available to the Commission upon
written request.
