CPAs and Audit Committees: The Perfect Match.

• Author: DOMINGUES, KENNETH
• Position: Certified public accountants - Brief Article

WHEN OPPORTUNITY KNOCKS, swing open the door. Recent regulatory developments provide CPAs with an excellent opportunity to:

* expand CPA visibility, influence and expertise the business community;

* support U.S. Securities and Exchange Chairman Arthur Levitt's efforts to improve listed companies' financial reporting quality, reliability and transparency;

* enhance investor confidence in the integrity of the financial reporting process; and

* improve securities' pricing efficiency.

A PERFECT MATCH

Last December, the SEC's division of market regulation approved corporate governance rule changes for the New York Stock Exchange, American Stock Exchange and National Association of Securities Dealers. These changes require some 13,000 publicly held companies' audit committee members to be independent, financially literate and have financial management expertise.

Without question, the profile of these audit committee members mirrors the CPA's profile. Public companies can expect to benefit from a CPA director as most CPAs are characteristically very diplomatic, nonthreatening, sensitive, knowledgeable, innovative and flexible--yet compliance oriented. What's more, a CPA's presence as an exemplary audit committee member would be welcomed when markets turn sour and trial attorneys look for weaknesses on behalf of clients who have incurred losses.

Under the NYSE rules, at least one audit committee member must satisfy the financial management expertise criteria by June 14, 2001. The AMEX and NASD rules are similar, but include some differences that should be verified.

ACT NOW

CPAs have a one-time opportunity to lift themselves as a group to positions of visibility, influence and service to the business, regulatory and investing community. This is a time when personal ambition must be sacrificed for the benefit of the profession as a whole to be successful. I encourage each of you to immediately market the talents of your CPA peers to listed company executives, independent directors and legal counsel, whether your peers are officers, committee chairs, financial planners, industry specialists or other specialized professionals.

If you are a CPA who works for a publicly held company, reflect on the CPA peers you know from an industry association or a CalCPA chapter or committee, and recommend one as a...