10 point plan to improve oversight of financial reporting process.
By: Anonymous
10 point plan to improve oversight of financial reporting process The New York Stock Exchange and The Blue Ribbon Committee saw a need for improvement in corporate auditing. They released a report of IO far-reaching recommendations intended to improve the quality of corporate financial reporting, Point # 1. Revise the definition of independent director. They say the definition should read as follows * Members of the audit committee should be independent and have no relationship with the corporation that may interfere with the exercise of their independence from management and the corporation. Point # 2 Require an independent audit committee. This point states that * (NYSE) and the (NASD) Should require companies meeting the size criteria (large) should have an audit committee made up of independent directors. Point # 3 Mandate minimum audit committee sizes and increased financial literacy. Companies that meet the size criteria (large) should have an audit committee comprised of a minimum of three directors. Furthermore, at least one of the members should have accounting or related financial management expertise, Point # 4 Mandate written charter detailing responsibilities and duties. Adopt a formal written charter approved by the full board of directors that specifies the scope of the committee's responsibilities, and to review and reassess the adequacy of the audit committee charter on an annual basis. Point # 5 Mandate annual i3ublic disclosure of audit committee activities The (SEC) should require proof from the committee that it has adopted a formal written charter, and to see if the committee satisfied it responsibilities under the charter. These findings also should be dis ...