The CFO, controller, chief accounting officer and external audit partner will all play roles in helping you get a deeper appreciation of the financial reports your committee is responsible for overseeing. The better the audit committee understands the performance metrics the compensation committee tags to incentive pay, the better the audit committee can monitor the integrity of those metrics- in particular, by focusing on whether the ability to achieve performance targets significantly affects management's financial reporting judgments.
XI'AN, China, June 27, 2011 /PRNewswire-Asia/ -- China Recycling Energy Corp. (NASDAQ: CREG or "the Company"), a leading industrial waste-to-energy solution provider in China, today announced that it has appointed Albert McLelland to the Board of Directors where he will chair the Audit Committee. Mr. McLelland will replace independent board member Sean Shao, who did not stand for 2011 - 2012 re-election due to other personal commitments. The board of directors is still comprised of nine members, majority of whom are independent. Mr. Guohua Ku, Chairman and CEO of CREG commented, "On behalf of the company, we are extremely pleased to have Albert join our esteemed Board of Directors and become the Chair of our Audit Committee. His wealth of experience and keen knowledge in fields such as ...
To allow sufficient time for discussion, the chair often instructs management to assume that all audit committee members (and others, as appropriate) have read all presentations and other pre-meeting materials, and to limit their "presentation" to an overview of the most significant issues of interest and relevance to the committee. * Setting aside time at the beginning of each committee meeting for members to have one last look at the agenda (including the amount of time allocated to each item on the agenda) after members have had an opportunity to review the premccting materials. * Concluding - and sometimes beginning-each audit committee meeting with an executive session so that members of the committee have an opportunity to discuss important matters privately. Reports to the Board...
A comparative survey of the differences in the audit committees of corporations with and without financial reporting problems suggests that a number of factors influenced the ability to critically assess financial reporting data. A higher percentage of companies without problems had CPAs on their audit committee, suggesting that they benefitted from financial expertise. If a committee was composed solely of outside board members, it was less likely to have problems. Additionally, fewer problems at companies whose committees met more often suggests that increased meetings improve responsiveness.
In recent years, several laws and regulations have set new requirements for the financial literacy and expertise of members of audit committees. Current NYSE and Nasdaq rules rely heavily on SEC Rule 10A-3(b), which sets required standards of independence, prohibiting an audit committee member from accepting directly or indirectly any consulting, advisory, or other compensatory fee from the issuer or any subsidiary under most cases. Current regulations and laws vary as to the meaning of financial literacy and financial expertise. Audit committee members are required to be able to read and understand fundamental financial statements under the rules of both the NYSE (Listed Company Manual section 303A.07) and Nasdaq (Rule 4350-4). Both regulations refer to SEC Regulation S-K for the accep...
From fair value accounting, to the convergence of U.S. GAAP and international financial-reporting standards to critical accounting policies, judgments and estimates, an ongoing challenge for audit committees is to understand important financial-reporting issues and developments affecting the company. The tremendous focus on risk today is an opportunity for the board to reassess the role of the audit committee (and the full board and other standing committees) in overseeing risk, based on the unique needs of the company and industry. 6.
Stefaniak and Robertson investigate whether two interactive factors (the significance of the audit mistake and the anticipated professional repercussions of mistake admission) influence the likelihood of disclosing an audit error. Lin and Hwang test the effects of two levels of audit committee independence (complete and proportional independence), and find both to have a significant effect in reducing earnings management. Cahill remarks that the activities of internal audit and the audit committee of non-executive directors are critical elements in the assurance process. Hüpkes contends that external auditors will commit a capital offence if they fail to collect and analyse critical financial and behavioural data.
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