You need to elaborate a bit more. Please do not assume we know what the acronyms stand for, or what the events mentioned are.

I've highlighted a few problems for you.

Bbmak wrote:

This is a summary from CPA Journal Here is the link http://www.nysscpa.org/printversions/cpaj/2007/107/p24.htm ========================================================================= In the article, “Can Audit Committees Prevent Management Fraud,” written by Steven A. Harrast and Lori Mason-Olsen, the authors briefly state the highlighted events of audit committees, describe the duties of the audit committee members, and present the results of a survey of audit committee members. The purpose of this article is to assist accounting professionals to recognize the critical role of an audit committee and allow this important resource to be used effectively. (Start with something that relates fraud detection to the role of the audit committee.) Management fraud is unlike employee fraud because it’s much harder to detect. Thus, the need of continuing improvement in the financial reporting process is required to help prevent the management fraud and improve the reliability of the financial reports. The need (emergence?) of audit committees traces back to the 1972 McKesson & Robbins fraud. (Elaborate. What happened?) Because of this, the Securities Exchange Commission (SEC) (Provide the full name the first time you use the term, along with the acronym) began to establish (establish or require?) the independent audit committees. By 1974, SEC started to require public disclosure of the audit committee members (do you mean the names of the members?). In 1998, the SEC Chairman amended (revised?) the policies to protect against financial frauds. Contemporarily, the public stock exchanges supported the Blue Ribbon Committee (BRC) to study the effect of audit committees, and the result of this study suggested that the audit committee must have at least three independent committees (members or sub-committees?) and one financial expert member. Until 2002, financial frauds and scandals tremendously endangered the economy; congress passed the SOX (Sarbanes Oxley Act?). Under the SOX section 301, the audit committees have responsibilities over financial reporting, such as employing independent auditors, overseeing the board, hiring, rotating, and compensating auditors, handling complaints about accounting, establishing procedures for resolving accounting and auditing matters, and having internal control of management (unclear). In response to the 2004 KPMG survey (You've never mentioned a KPMG survey before. Explain), the first question is, “Do audit committee members believe that recent changes could make a difference?” 70.5% of the businesses believe that some of the losses due to the financial frauds in the last few years can be prevented by effective auditing members (you mean committee members?). The survey presents (wording) that most audit committee members agree with the notions of SEC and BRC about the significance of an effective audit committee; some people even add the comment that an audit committee must be diligent in order to detect fraud. The second question is, “How much time are audit committee members spending on each committee?” According to the survey, most auditing (not auditing members) members consider that 50 to 100 hours are a reasonable annual meeting time. The (article) significant amount of time is needed to avoid frauds occurred. In fact, a small portion of the committee members argue that spending over 300 hours annually on (article) audit committee would be a factor for avoiding fraud. Also, the NYSE (don't assume we know what NYSE stands for) believes that no one should be on more than three committees a year to uphold the effectiveness of the committees. So, stakeholders can have confidence in the committee members. The third question is “Are there activities that detract from audit committee effectiveness?” According to the KPMG study, 37% of audit committee members think that compliance activities will reduce effectiveness of the audit committee because the compliance burden will add to the time-commitment burden of directors and make serving audit committees unattractive. If the compliance burden continues to increase, it may restrict the capability of the audit committee to effectively monitor financial reporting processes. Also, under the NYSE rule, the audit committee members must include a financial expert, but including a financial expert may reduce the effectiveness of the audit committee because audit committee members may overreliance on the financial expert. Thus, the purpose of having an expert will become useless. According to the survey, most audit committee members agree that there is a risk that audit committee members may inappropriately defer to the audit committee financial expert. The fourth question is, “Are audit committees receiving the information necessary to fulfill their oversight function?” According to the survey, about 50% of the audit committee members consider the quality of pre–audit committee meeting information as moderate or low. In order to improve the quality, (article) audit committee must have a good relationship and work closely with the top level managers, and the internal and external auditors. To accomplish that, committee members should be informed about all important issues in financial reporting so the important issues can be resolved first. Independent audit committee is necessary to ensure the accuracy of the financial reports. Although, the authorities and duties for the audit committee have been increased dramatically in the recent years, there are still some factors affecting the effectiveness of the audit committees, such as over depending on a financial expert, poor quality information for the committee, and significant compliance burden. In the bottom line, not all audit committees will be able to stop financial frauds, but a diligent audit committee should be able to prevent it from happening. ==========================================================================