Audit Committees: A guide for directors, management, and consultants.

• Author: Hansen, Jr., C. Russel
• Position: Director Library

By Frank M. Burke and Dan M. Guy

Published by Aspen Law & Business, New York, 310 pages, $115.00

THIS RICH SOURCE of audit committee material is a "must buy," but read it selectively. CEOs and directors whose principal occupations are other than directorships may wish to read only certain portions. Consultants, non-CEO management, and full-time directors are likely to find the entire book informative but of varying quality. This edition of the book is current through December 31, 2000-- which, of course, does not include such developments as Enron and SEC Chairman Harvey Pitt's initiatives since taking office last year.

Although not complete, Audit Committees is among the better content resources in the field. The navigation aids are good. For the guide's 18 chapters, the authors have provided a detailed table of contents, chapter summaries, 31 exhibits, 25 appendices, a glossary, a list of resources, and an index.

The guide is not director friendly, though. Its extensive chronological presentation breaches a key rule of board communication -- to speak and write in bullets (having backup readily available). In addition, the book's overabundance of preaching" grates on the ear and makes separating factual gems from aspirational sermons difficult.

The summaries need improvement. Some of them contain information not found in the text purportedly being summarized. Others do not fairly reflect the related points in the chapter. Some of the summaries exceed one half the length of the related discussions.

The first practical "take away" content does not appear until Chapter 8, "Responsibilities of the Audit Committee." Most directors will probably want to start with Chapter 12, "Relationship with the External Auditor." One of the guide's strengths is this discussion of the external auditor relationship, and this material alone is worth the price of the book. This chapter and related exhibits and appendices provide helpful insight into the audit profession's expectations of itself, including mandates to auditors designed to assist boards and their audit committees.

Certain other chapters, while not up to the same level, are helpful. These chapters include "The Audit Committee's Oversight of Internal Control" and "Relationship with the Internal Auditor." For those directors who have not yet studied the single most important audit committee resource -- The Report and Recommendations of the Blue...