What is required to establish “active supervision” of persons engaged in preparing, auditing, analyzing or evaluating financial statements?
“Active supervision” requires more than the mere existence of traditional reporting relationships. Instead, active supervision requires that a person participate in, and contribute to, the process of addressing the same general types of issues regarding the preparation, auditing, analysis or evaluation of financial statements as those addressed by the persons being supervised, albeit at a supervisory level. In addition, the person actively supervising must have experience that has contributed to the general expertise necessary to prepare, audit, analyze or evaluate financial statements that is at least comparable to the general expertise of those being supervised. A chief executive officer should not be presumed to qualify. 5. Are there any others qualities that the SEC considers important in designating an audit committee financial expert? Yes. The SEC admonishes boards to ensure that the financial expert “embodies the highest standards of personal and professional integrity,” taking
