Independent Audit Review Sample Clauses
The Independent Audit Review clause establishes the right for one or both parties to have an independent third party examine and verify certain records, processes, or compliance with contractual obligations. Typically, this clause outlines the scope of the audit, the frequency with which audits may occur, and the responsibilities of both parties in facilitating the review, such as providing access to relevant documents or premises. Its core practical function is to ensure transparency and accountability, allowing parties to confirm that contractual terms are being met and to identify and address any discrepancies or non-compliance.
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Independent Audit Review. (a) At the Company’s expense, the Manager shall cause the Approved Accountant to conduct an audit of the Company’s financial statements each year for the twelve-month period ending December 31st of such year, in accordance with generally accepted accounting principles in the United States, consistently applied. A copy of the audit report and the accompanying financial statements shall be provided to the Members. At Beacon’s request and expense, the Manager shall also cause the Approved Accountants to prepare the annual audits of the Company’s financial statements using US income tax accounting principles. The Manager shall be reimbursed by Beacon for any out-of-pocket costs incurred by the Manager in assisting with the preparation of any US income tax accounting-based audits.
(b) Beacon shall have the absolute right to undertake a periodic audit review of the Company or its Projects, the fees payable hereunder to the Manager and the Manager’s compliance with the provisions of this Agreement. Such audit review may be undertaken directly by Beacon or by third parties engaged by Beacon, including accountants, consultants and appraisers. The Manager shall reasonably cooperate with Beacon or any such third party in connection with such audit review. All adjustments, payments and reimbursements to the fees payable hereunder to the Manager demonstrated by Beacon or its representatives to be appropriate by such audit review shall be effected promptly by the Manager; provided, however, that if the Manager disputes any of such adjustments, payments or reimbursements, then the matters in dispute shall be submitted to a mutually acceptable firm of nationally recognized independent certified public accountants, who shall determine which party’s determination is correct and whose decision shall be binding. If the audit for any given annual period discloses that aggregate adjustments, payments and reimbursements in favor of the Company exceed either a percentage in excess of five percent (5%) of the total distributions made to the Members in the year under audit or (with respect to the Manager’s fees only) result in an adjustment in excess of five percent (5%) of the fees payable to the Manager, the cost of such audit shall be paid by the Manager out of its own funds. Otherwise, the cost of the audit shall be paid by Beacon from its own funds.