Memphis is the birthplace of this issue of FEI Express. I'll be visiting our chapter here shortly, after a nice meeting with our Western Michigan Chapter last night. Thanks to Bill Waanders for inviting me to speak to the group!!! I will be in Chicago next week to speak at the Illinois CPA Society Controllers Conference. I hope to see many FEI members there, too!

Audit Committee Reports and Charters
Companies are now regularly filing their audit committee charters, auditor fees, and committee reports. Caterpillar Inc.'s proxy just hit my desk, and it does a great job with each section. We've posted them on our web site to make it easy for you to download and alter for your use: Here's CAT's Audit Committee Charter and their Audit Committee Report.

Some of this may be like "breathing air" to you, but I think highlighting some of the key points in their audit committee charter is useful:

1. They specify the AC will meet at least four times a year, twice privately with the auditor.
2. "It is understood that the independent auditor is ultimately accountable to the audit committee and the Board." The AC has the authority and responsibility to select or replace the auditor.
3. "The AC periodically reviews the adequacy of accounting and financial controls with management and the auditors, and elicits recommendations for improvements for increases in controls.
4. Prior to the 10-Q being filed, the AC reviews any significant issues arising out the auditor's quarterly review.
5. Other areas of review for the AC include: significant litigation or regulatory matters; senior officer expenses; transactions with management; adequacy of information technology controls; and the use of derivative securities.

The Caterpillar examples are good ones, and I hope you find them useful. Unrelated to Caterpillar, one thing I hear over and over again (and witness in practice) is the widespread belief by too many directors that the primary role of the audit committee is beat the public accountant fee down each year. I am totally supportive when it comes to saving money, but this task rests in management's capable hands. Audit committees are so time-pressed to exercise their important oversight role of financial reporting and control that this menial task should rarely find its way into their agenda.

But speaking of fees, Caterpillar, as required this year, disclosed the fees paid to its external auditors for 2000. The audit cost totaled $6.7 million, services for IT system design and implementation totaled $3.4 million and all other services totaled $12.8 million.

Berkshire Hathaway Annual Report
Warren Buffett's latest letter to shareholders is out, and can be accessed in full at http://www.berkshirehathaway.com/2000ar/2000letter.html. He voices his support for the FASB's proposed new rules for business combinations and the non-amortization of goodwill. He has been a long-time opponent of pooling accounting and the general use of stock as an acquisition currency. He also expresses his support for Reg FD. He encourages management teams to shy away from the use of EBITDA ("does management think the tooth fairy pays for capital expenditures?"). He also encourages CEOs to explain the company's direction and strategy in their own words, and avoid publicly stating their expectations for long-term growth rates. It's always thought-provoking reading, whether you agree with him or not.

Siebel Systems and Customer Satisfaction
I recently read a really good interview with Tom Siebel, chairman and CEO of Siebel Systems, in this month's edition of the Harvard Business Review. Siebel Systems does close to $2 billion in software sales each year, leading the Customer Relationship Management (CRM) category. Here are some of his key insights to their success:

• The cornerstone of their corporate culture is customer satisfaction. All their communications (advertising, shareholder reports, brochures etc) are targeted at employees, emphasizing Siebel's commitment to the customer.
• He sees his primary job as cultivating a company culture that benefits all employees and customers.
• He disdains CEOs who consider their primary job to be driving up the company's stock price. He sees that as a secondary concern understanding what customers need, and delivering it.
• His company measures customer satisfaction in a very quantifiable way, with surveys every six months that cover everything from the quality of documentation to the contracting process.
• They set organizational objectives quarterly, which he communicates on the first day of each quarter.

Monthly Financial Executive Magazine Survey
Our magazine editors, Jeff Marshall and Ellen Heffes, and art director, Laura Avello, have moved Financial Executive magazine up to another level. We now run a monthly survey, with the results reported in the magazine. Click here to give us your answer to the question: "Have the results from your year 2000 e-commerce/e-business initiatives been: as expected, better than expected, less than expected, or 'what e-business'?"

Benchmarking the Quality of Earnings
Don't miss Benchmarking the Quality of Earnings, a practical one-day conference co-sponsored by FEI and the AICPA. It's taking place on April 26 in New York, at the Hilton Hotel. The agenda and on-line registration are available here. Registration is $149 for the full day.

We have a great line-up of top speakers, from SEC Commissioner Isaac Hunt and Chief Accountant Lynn Turner to leading financial analysts, prominent accounting experts, academics, and FASB rule-makers, as well as senior executives responsible for financial reporting. High-quality reporting is not only vital to our capital markets, but its an important issue for practitioners who must deal with tougher regulations and closer scrutiny by the investment community. Audit effectiveness and the role of audit committees will be another key area of discussion at the conference, and Shaun O'Malley, chairman of the Panel on Audit Effectiveness, will be on board to share his insights.

FEI Yellow Pages: A Resource for Financial Officers
Members get a free listing in our online b-to-b directory. Take advantage of it by clicking here.

FASB/SEC European Financial Reporting Conference in Frankfurt
In keeping with the "International" in FEI and the expanding reach of FEI Express, we would like to make our readers aware of the Third European FASB-SEC Financial Reporting Conference, being held April 5-6, 2001 in Germany at the Johann Wolfgang Goethe-University Frankfurt/Main. The conference will focus on identifying key accounting and financial reporting problems European companies face when they adopt U.S. GAAP, particularly when they prepare to list themselves on U.S. stock exchanges. Also featured will be the development of globally acceptable, high-quality financial accounting standards. The FASB, the SEC and the new German Accounting Standards Committee (GASC) will outline their respective positions on setting global standards. For more information, visit http://www.fasb.org.

The Kinesthetic Speaker: Putting Words Into Action, How Leaders Motivate People To Act on Their Vision
Don't miss our upcoming teleconference, Tuesday, April 10 at 2 PM ET. Register here.

Chemical Reactions Examined: DOW's Insights on the E-Bond
Last August, Dow Chemical became the first nonfinanical corporation to sell its bonds via a Web-based Dutch auction, where the market, not Wall Street, sets the price. Dow Treasurer Geoff Merszei will lead a discussion of this watershed event and its implications for saving corporate issuers significant dollars. Join us on Tuesday, March 20, at 3 PM ET. Sign up now by clicking here.

Job Posting- CFO
(FEI Job #5224) - National firm located in Morris County, NJ, is seeking a professional who will direct all accounting, finance and treasury functions. Will represent company to outside financial parties, including bankers and investors, will manage banking relationships, ensure convenant compliance, present monthly financial statements to Management and Board of Directors, maintain a system of internal controls and identify/implement improvements. 10-15 years relevant experience; service industry background preferred. Hands-on experience managing Accounting/Finance. Direct experience with IPO process and communications with investment community. CPA/MBA preferred. Familiarity with accounting software/systems. Please fax resume to: (973) 984-5865.

To view other jobs, visit the FEI Job Posting Center (voted one of the "Best of the Web" by Forbes magazine) at http://www.financialexecutives.org/careers/agreement.cfm.

New Member Welcome
Congratulations to Bob Dilly, Controller, Adidas America, Greer, SC, and There du Pont, VP, Finance, Wawa Inc., Philadelphia, PA.

That's all for now,