September 9, 2015
Audit Committees should review and report on 1) Any disagreements between management and auditors about accounting practices or results which would be material; 2) Any requests by management made verbally or in writing to change an outside auditor's conclusions, methods, or personnel, such as a request to change audit staff to remove any outside auditor.
Audit Committees should have the right to meet with auditors independent of management to review any results which have been a) changed at the request of management b) changed from prior practice. Audit committees should report their meetings with independent auditors and any items discussed in connection with issuance of annual reports. Such enhanced audit committee interaction and identification of issues might prevent or have prevented problems such as Enron's mark to market recognition of future sales, or Banking industry creation of off-book special purpose entities SPE's who's later recognition on parent books contributed to the financial crisis of 2008.