Volume 2, Issue 7

August 2008

I. CAQ Concludes its Public Dialogue Tour in Washington, D.C. with Largest Crowd to Date

Approximately 150 investors, regulators, academics and corporate representatives convened on July 22 at the National Press Club in Washington, D.C.to discuss how to improve the quality, transparency and relevance of financial information during the CAQ's capstone Public Dialogue Tour event.

The prestigious panel of experts included Dr. Charles M. Elson, Edgar S. Woolard, Jr., chair in Corporate Governance, professor of Law and director of the John L. Weinberg Center for Corporate Governance at the University of Delaware; FASB Chairman Robert H. Herz; Nell Minow, editor and co-founder, The Corporate Library; PCAOB Chairman Mark Olson; Gene Riechers, general partner, Valhalla Partners; and Arne M. Sorenson, chief financial officer, executive vice president, Continental European Lodging, Marriott International, Inc.

In a wide-ranging conversation, the panel considered market volatility, fair value accounting, the value of audited financial statements, how to better tailor audits to meet investors’ changing needs, and a possible move by the United States to adopt high-quality international accounting standards.

A summary of the Washington event and information about previous Dialogue Tour events, including a highlights video, are all available on the CAQ Website.

By the end of the year, the Center for Audit Quality intends to issue a final report and recommendations based upon the ideas and perspectives presented by Tour participants across the country.

II. CAQ's Second Annual Investor Survey Finds Three-Quarters are Confident Investing in Public Companies

The survey, a nation wide telephone poll of 1,000 individuals with investments of $10,000 or more, showed that although investors are less confident in the U.S. capital markets than they were a year ago, 70 percent or more continue to voice confidence in the markets and U.S. companies in general, as well as in audited financial statements. Public confidence in audited financial statements remains high at 73 percent (down from 80% in 2007) despite some weakening in response to market conditions. Despite the drop, the data suggests a significant reservoir of faith on the part of investors.

“These are trying times for investors,” said CAQ Executive Director Cindy Fornelli. “But regardless of economic changes and market fluctuations, individuals clearly want to know that the financial information about the companies they invest in is reliable – even if it is not always favorable. That’s why the work of public company auditors is so important.”

Interestingly, four in 10 say their investment behavior has not been changed by recent economic difficulties. Though the survey did not delve deeply into the thought processes employed in these decisions, the poll found that only three percent of those who have changed their investing behavior have sold their investments, the same number who reported investing more.

The survey also revealed that investors do not believe that the current financial reporting system fully meets their needs. The CAQ intends to provide recommendations on this issue in its final report of the Public Dialogue Tour to address this growing need for change in the current reporting process.

The press release, survey highlights and the full survey results are available on the CAQ’s Website.