What does the SEC mean by the term “audit committee financial expert”?
The SEC has defined the term “audit committee financial expert” to identify persons with the skills and characteristics that the SEC views as critical to the effective functioning of audit committees. In order to qualify as an audit committee financial expert, a person must possess five specific attributes that reflect an enhanced level of financial sophistication and must have acquired these attributes through particular kinds of experience. These requirements, described in more detail below, are designed to ensure that an audit committee financial expert can ask the right questions to determine whether a company’s financial statements accurately reflect the company’s actual value, as well as to serve as a resource for other members of the audit committee. 3. What are the attributes required to qualify as an audit committee financial expert? An audit committee financial expert must possess all of the following attributes. • An understanding of financial statements and generally accept
