Volume 3, Issue 1

January 2009

I. CAQ Reacts to SEC’s “Mark-to-Market” Accounting Report

The Securities and Exchange Commission (SEC) staff on Dec. 31 recommended against suspending fair-value accounting rules. In a 211-page report to lawmakers, the SEC staff concluded that, “The abrupt elimination of fair value and mark-to-market requirements would erode investor confidence in financial reporting.”

CAQ Executive Director Cindy Fornelli said she was pleased to see that the SEC staff has concluded that a suspension of fair value or ‘mark-to-market’ accounting is inadvisable. “As does the staff, we believe enhancements to accounting rules may be appropriate – but only in extraordinary circumstances, and only if transparency is not compromised as a result. Importantly, any changes should be proposed and dealt with through the independent standard-setting process.”

II. “The Opportunity for Auditors”

On Dec. 8, Cindy Fornelli was a featured speaker at the American Institute of Certified Public Accountants’ National Conference on Current SEC and PCAOB Developments. Her presentation, entitled “The Opportunity for Auditors,” made note of investors’ desire to see public company auditors play a role in discussions about the financial markets in the wake of the credit crisis. Fornelli said that in addition to doing what they are required to do (audit financial statements and internal control over financial reporting), auditors have an opportunity to lend their support to those ideas and concepts they believe will improve the operations of our marketplace and thereby enhance investor confidence.

III. CAQ Applauds Nomination of Mary Schapiro to Lead SEC

President-elect Barack Obama on Dec. 18 nominated Mary Schapiro as chairman of the SEC. In a statement applauding the appointment, CAQ Executive Director Cindy Fornelli described Schapiro as a talented individual, with an abundance of regulatory experience by virtue of her leadership of the SEC (where she served as acting chairman), the Commodity Futures Trading Commission and, most recently, the Financial Industry Regulatory Authority.

"Having worked with Mary at the SEC, I know her to be a tough, but practical, regulator – which is both a rare combination of qualities and at the core of a skill set that will be of critical importance in guiding the Commission in this challenging economic environment,” Fornelli remarked. “I very much look forward to working with Mary in her new role as SEC chairman.”

IV. Corporate Governance Recognition for CAQ’s Leadership

CAQ Executive Director Cindy Fornelli was honored as one of the most influential players in corporate governance at Directorship magazine’s annual D100 recognition dinner on Dec. 2. Other honorees included two members of the CAQ’s governing board: governing board chair, and Ernst & Young LLP chairman and CEO, James Turley; and governing board co-vice chair, and co-founder of The Directors’ Council, Michele Hooper.