Appendix A: From the Securities and Exchange Commission (SEC).
Final Rule: Disclosures required by Sections 406 and 407 of the Sarbanes-Oxley Act of 2002.
Section II. A. 4c Final definition of Audit Committee Financial Expert
The final rules define an audit committee financial expert as a person who has the following attributes:
• An understanding of generally accepted accounting principles and financial statements;
• The ability to assess the general application of such principles in connection with the accounting for estimates, accruals and reserves;
• Experience preparing, auditing, analyzing or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the registrant's financial statements, or experience actively supervising one or more persons engaged in such activities;
• An understanding of internal controls and procedures for financial reporting; and
• An understanding of audit committee functions.
Under the final rules, a person must have acquired such attributes through any one or more of the following:
1. Education and experience as a principal financial officer, principal accounting officer, controller, public accountant or auditor or experience in one or more positions that involve the performance of similar functions;
2. Experience actively supervising a principal financial officer, principal accounting officer, controller, public accountant, auditor or person performing similar functions;
3. Experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing or evaluation of financial statements; or
4. Other relevant experience.