FEI Members Named To Treasury Advisory Committee On Audit Profession

October 2, 2007

FEI Summary

Three members of Financial Executives International (FEI), the leading professional association for senior financial executives, are among those named to the U.S. Treasury Department’s Advisory Committee on the Audit Profession (ACAP). They are: Ken Goldman, Prof. Gary John Previts and Lynn E. Turner, whose bios appear below.

FEI President and CEO Michael P. Cangemi congratulates the FEI members appointed to Treasury's committee and commented, "FEI stands ready to support the committee as it deliberates important issues relating to audit quality, audit choice and the soundness of the profession.”  

The charge of the committee – focusing on sustainability of the audit profession – is expected to potentially include discussions about liability caps for audit firms, the quality of audits and other matters.

The appointment of the 21-member committee was announced on Oct. 2, by U.S. Treasury Secretary Henry M. Paulson; the names are listed in this press release. The co-chairs of ACAP were previously announced as Arthur Levitt, former chairman of the Securities and Exchange Commission (SEC), and Don Nicolaisen, former SEC chief accountant. The committee includes observers from the SEC, Public Company Accounting Oversight Board (PCAOB), Financial Accounting Standards Board (FASB), International Accounting Standards Board (IASB) and the Autorité des Marches Financiers in France.

As noted in the press release, Treasury’s ACAP will examine: 

• auditing industry concentration;
• financial soundness;
• audit quality;
• employee recruitment and retention; and
• other topics.

"Treasury expects the committee to produce findings and recommendations by early summer 2008,” states the press release. “The committee structure will encourage an open and public discussion, with no predetermined outcomes.”

In related remarks at a press conference announcing the committee members, Treasury Secretary Paulson said: "The committee will be a public forum, and its members represent a wide range of views – including small and large investors, auditors, financial institutions, public company executives, international regulators and universities."

Paulson added, "The committee has been chartered to develop recommendations as to what can best be done to sustain a vibrant auditing profession, a profession whose work is critical to investor confidence in our capital markets."

"One of the great strengths of our markets is their dynamism – that they change to serve the needs of investors and businesses," said Paulson. "Yet, our markets are not immune to challenges…. Our goal is to help ensure that U.S. capital markets remain efficient, innovative and continue to drive capital to its most productive uses. Our markets must retain the integrity and efficiency that has contributed greatly to prosperity in America and around the globe. Through its work, the committee will help sustain a vibrant auditing profession and contribute to the broader examination of U.S. competitiveness."

Additional information, including a link to submit comments to the ACAP, is available on the committee's website at:  http://www.treas.gov/offices/domestic-finance/acap/.

Following is detailed information on the three FEI members named to Treasury’s ACAP:

Ken Goldman is Chief Financial Officer of Fortinet Inc. He is a member and former president of Financial Executive Institute [International], Santa Clara chapter and served as an advisory council member of the Financial Accounting Standards Board from 2000 to 2004.

Gary John Previts is a Professor of Accountancy at Case Western Reserve University. He is a member of the Accountability Advisory Council of the U.S. Government Accountability Office and President of the American Accounting Association.

Lynn E. Turner served as the Chief Accountant at the SEC from 1998 to 2001. He serves as a senior advisor to Kroll Zolfo Copper and is a member of the Standards Advisory Group of the Public Company Accounting Oversight Board and the Financial Accounting Standards Board Investor Technical Advisory Committee.

Prepared Oct. 2, 2007 by Edith Orenstein (eorenstein@financialexecutives.org), Director of Technical Policy Analysis, Financial Executives International. This summary does not represent FEI opinion unless specifically noted above.