1938 McKesson & Robbins fraud

1939 NYSE recommends the establishment of audit committees

1940 SEC recommends that companies form audit committees—Accounting Series Release (ASR) No. 19

1967 AICPA Executive Committee Statement on Audit Committees of Board of Directors recommends theestablishment of audit committees

1970 Penn Central bankruptcy

1972 ASR Nos. 123 and 126

1973 NYSE White Paper opines that audit committees are a necessity

1974 ASR No. 165

1976 Committees chaired by Senator Lee Metcalf and Congressman John Moss complete their investigations into th ti f i AICPA f C i i A dit ’ R ibiliti (C h C i i )the accounting profession AICPA forms Commission on Auditors’ Responsibilities (Cohen Commission)

1977 Metcalf Committee Staff Report, The Accounting Establishment, is issued.

1978 Foreign Corrupt Practices Act (FCPA)

1985 AICPA Cohen Commission issues Commission on Auditors’ Responsibilities: Report, Conclusions, andRecommendations. AICPA forms a special committee to consider the adoption of an audit committee requirement. NYSE requires companies with common stock issues registered on NYSE to have an audit committee

1987 Congressman John D. Dingell convenes the first of a series of hearings into the effectiveness of independent auditors

1988 National Commission on Fraudulent Financial Reporting (NCFRR/the Treadway Commission)

1989 SEC’s five commissioners, by a narrow vote, decide not to require all public companies to have audit committees,but encourage their formation. Statement on Auditing Standards (SAS) No. 61, Communication with the Audit Committees.

1989 The National Association of Securities Dealers (NASD) approves a requirement that National Market Systemcompanies (a subset of the over-the-counter market) must have audit committees. Statement on InternalAuditing Standards No. 7 (SAIS No. 7) Communication with the Board of Directors

1991 Federal Deposit Insurance Corporation Improvement Act

1992 Committee of Sponsoring Organizations of the Treadway Commission (COSO) issues Internal Control-Integrated Framework

1993 Public Oversight Board of the AICPA’s SEC Practices Section releases In the Public Interest

1994 Kirk Panel (Public Oversight Board of the AICPA’s SEC Practices Section) releases Strengthening the1994 Kirk Panel (Public Oversight Board of the AICPA s SEC Practices Section) releases Strengthening theProfessionalism of the Independent Auditor

1995 Public Oversight Board of the AICPA’s SEC Practices Section releases Allies in Protecting Shareholder Interests

1998 SEC Chairman Arthur Levitt delivers speech at the NYU Center for Business and Law in which he calls for theNYSE and Nasdaq to form a “blue ribbon committee” to study the role of the audit committee

1999 Report and Recommendations of the Blue Ribbon Committee on Improving the Effectiveness of CorporateAudit Committees. SAS No. 90, Audit Committee Communications. SEC Release No. 34-42266: AuditCommittee Disclosure. NYSE and Nasdaq adopt new listing requirements, mandating the existence,composition, director qualifications,and duties of an audit committee

2000 POB’s Panel on Audit Effectiveness releases Report and Recommendations

2001 Arthur Levitt, SEC Chairman, issues letter to audit committee chairmen

2002 Sarbanes-Oxley Act

2003 SEC Release Nos. 33-8177 and 34-47235: Disclosure Required by Sections 406 and 407 of the Sarbanes-OxleyAct of 2002. SEC Release Nos. 33-8220 and 34-47654: Standards Relating to Listed Company AuditCommittees. SEC approved amendments to NYSE and the Nasdaq corporate governance listing standards.

2004 NYSE submitted to the SEC for approval amendments to its corporate governance listing standards

Public companies may form other standing or special committees to deal with issues requiring particular expertise.

Examples: 1. Finance committee to oversee financial activities2. Outside directors committee to maintain board independence3. Executive committee to approve managements decision,

plans , and actions on a behalf of entire board.