SEC Audit committee memo 2

TO OUR FRIENDS AND CLIENTS April 24, 2003 SEC Adopts Audit Committee Standards for Listed Companies The Securities and Exchange Commission has adopted new rules regarding the audit committee requirements established by the Sarbanes-Oxley Act. The rules prohibit the New York Stock Exchange, Nasdaq and other national securities exchanges and associations from listing any security of an issuer that does not meet the following standards: • Each member of the issuer's audit committee must be "independent". • In order to be deemed independent, an audit committee member must not accept, directly or indirectly, any consulting, advisory or other compensatory fees from the issuer or a subsidiary and may not be an "affiliated person" of the issuer or any of its subsidiaries. A Partnership Including Professional • The audit committee of each issuer must be directly responsible for Corporations the appointment, compensation, retention and oversight of the New York work of any registered public accounting firm engaged for the One New York Plaza purpose of preparing or issuing an audit report or performing other New York, NY 10004 212.859.8000 audit, review or attest services for the issuer and the auditor must report directly to the audit committee. Washington, DC 1001 Pennsylvania Avenue, NW • Each audit committee must establish procedures for the receipt, Washington, DC 20004 retention and treatment of complaints regarding accounting, 202.639 ...