Volume 1, Issue 2
June 2007

Sarbanes – Oxley Fifth Anniversary at NPC
To mark passage of the fifth anniversary of the Sarbanes-Oxley Act of 2002 on July 30, the Center for Audit Quality will host a panel discussion and luncheon at the National Press Club in Washington, D.C.

Our goal is for the event to contribute to the ongoing conversation about the Sarbanes-Oxley Act’s far-reaching impact and the role it will play in the future. In addition to interested journalists, invited guests will include representatives from key financial services organizations, investor groups and other capital market participants. If you would like to attend this event, please contact Jane Cobb, director of operations for the CAQ.

The panel discussion will focus on the U.S. business and legal environment pre-Sarbanes-Oxley, the impact of the Act over the past five years, and its role and influence moving forward. The discussion will not only look at Section 404, but more broadly at the entire Act.

This event comes after Cindy Fornelli, the Center for Audit Quality’s executive director, publicly commended both the PCAOB and the SEC for standards enacted to make Section 404 of Sarbanes-Oxley stronger for investors and more efficient for complying businesses.

SEC and PCAOB Regulatory Action – Section 404 of the Sarbanes-Oxley Act
On May 23, the SEC took action to address concerns about AS2, issuing new management guidance. The following day, the PCAOB affirmed that standard in its guidelines. On May 24, Fornelli said, “We believe the changes, along with the important measures adopted yesterday by the Securities and Exchange Commission, include significant investor safeguards and will make implementation of Section 404 of the Sarbanes-Oxley Act more efficient.”

In particular, Fornelli lauded the adoption of new management guidance by the SEC, and combined support from the SEC and PCAOB, in its new Auditing Standard 5 (AS5), for the single-standard approach, the annual testing of operating effectiveness of controls, and the requirement that management and auditors apply a risk-based approach to testing controls.

Public Dialogue Tour
The CAQ has continued its nationwide public dialogue tour with stops in Charlotte, N.C., and, most recently, Minneapolis. These town hall-style meetings bring together investors, academics, business leaders and auditors to discuss and debate the future of business reporting and best practices for modernizing financial information. At the end of the tour, the themes that have emerged from the discussions will be compiled into comprehensive findings that the CAQ will share with investors, regulators, legislators and others interested in the modernization of financial and business reporting.

The CAQ’s public dialogue tour will continue in Seattle on June 28, where panelists will include Washington State Attorney General Rob McKenna; Keith Grinstein, partner with Second Avenue Partners; Dick Taggart, executive vice president and former chief financial officer for Weyerhaeuser; and James Jiambalvo, dean of the University of Washington Business School. The dialogue will be moderated by Terence Smith, special correspondent to The NewsHour with Jim Lehrer.