SOX - Lisa

Question 1

Financial Expert

Answer 1

The Sarbanes-Oxley Act provides that at least one member should be a “financial expert.” The names of the financial experts must be disclosed. If the firm does not have a financial expert, it must provide an explanation. A financial expert is one that possesses all of the following attributes:

1] An understanding of generally accepted accounting principles and financial statements
2] Experience in preparing, auditing, analyzing, or evaluating financial statements of the breadth and complexity expected to be encountered with the company
3] An understanding of internal controls and procedures for financial reporting
4] An understanding of audit committee functions

These attributes would be acquired through (1) education and experience as a principal financial officer, controller, public accountant, or equivalent, (2) experience supervising an individual in one of the positions in (1), (3) experience overseeing or assessing the performance of companies or public accountants with respect to preparing, auditing, or evaluating financial statements, or (4) other relevant experience.

Question 2

Compensation Cmte Reqs of Dodd Frank 2010

Answer 2

Members Must be Independent
Shareholders are allowed a non-binding vote on compensation every three years
Shareholders are allowed to vote every six years on whether vote on compensation s.b. Held
More often
Shareholders get a non-binding vote on whether “golden parachutes” are OK

The compensation committee (1) reviews and approves CEO compensation based on meeting per­formance goals, (2) makes recommendations to the board with respect to incentive and equity-based compensation plans, and (3) attempts to align incentives with shareholder objec­tives and risk appetite.

Question 3

Cmte Req’s and BOD Dodd Frank - Which one’s my independent

Answer 3

Only the compensation
The audit Cmte no
The governance Cmte no
The board itself - no