TO: FEI Members and Prospective Members FROM:   Phil Livingston Inside This Express: Audit Committee Survey Internet Security Wake-up Call SAS 90 Feb. 1 Early Bird Registration Deadline for FEI's Annual Conference Visit to Indianapolis Chapter E&Y Tax Legislative Summary Member News Financial Research Online Shop Online and Support FEI New Member Job Posting Welcome to FEI Express.     Some thoughts … Audit Committee Survey At our recent financial reporting conference, we polled our members on audit committee effectiveness. One of the key messages from the response is that many CFOs and controllers are actually very supportive of a more active audit committee. In addition, audit committee self-assessment is on the upswing, but there are still many companies that have yet to implement such a process. Here's a link to our final release: http://www.financialexecutives.org/download/ACSurvey.doc. Some great suggestions were made in response to the question, "Name the single most important step companies can take to improve audit committee effectiveness." Here are some verbatim responses from your peers: "Send the message that integrity and long-term goals will not be sacrificed for a quarter/year." "Appoint members who are inquisitive and who question things, not just accept the status quo." "Chose knowledgeable committee members with significant financial experience." "Require that audit committee members have an adequate financial and accounting background to ensure that management is challenged and appropriate questions are asked." "There should be an annual review of the areas subject to 'management judgment' to ensure consistent, and above all, honest evaluations of business risk and related accounting." "Strong chairman with strong finance background." "Periodic and consistent meetings; scheduling appropriate amount of time with adherence to charter." Return to top. Internet Security Wake-up Call 27% of our call participants experienced some form of network security breach in the last five years!!!!! Last week, we discussed this subject with Howard Schmidt of Microsoft and Bruce Murphy of PriceWaterHouseCoopers. We had 200 on the call. We talked about the recent CD Universe case in which a hacker downloaded the names and credit card information for thousands of its customers. It appears that the security breach was the result of an all-too-common problem. The database software still had the INITIAL DEFAULT PASSWORD that comes installed for the system administrator. I hear of this problem over and over again. It's a simple discipline to change the administrator's password quickly before going live with the applications. In general, it points to a lack of password control. None of us changes our passwords often enough. Voice-mail systems are much more vulnerable than most people think, too. The presentations are available on our web site at:http://www.financialexecutives.org/download/cfit.ppt. Also an excellent article on the CD Universe case is at www.msnbc.com/news/357305.asp. Return to top. SAS 90 The AICPA just issued SAS 90 on Communications with Audit Committees. This is the revision to SAS 61 and 71, and is effective for audits of financial statements for periods ending on or after Dec. 15, 2000, and quarterly reviews after March 15, 2000. A download is available now at www.aicpa.org, and we'll get it up on FEI's web site, too. The new standard covers both auditor discussions of the quality of accounting principles, estimates, judgments, uncertainties, etc., and the issue of reviews of interim financial information. Thanks to Roger Trupin, Fred Battline and Gerry Ketz at Citicorp for their heads-up call yesterday. Return to top. Feb. 1 Early Bird Registration Deadline for FEI's Annual Conference The first brochure for the annual conference (to be held May 24-27 in Chicago) went out in December, but many members overlooked it (it had the "new FEI" look to it). Never fear - the details are on our web site under conferences, and you can submit an online registration. [ http://www.financialexecutives.org/confsem/upcoming.html ] The conference got great reviews last year and it was FUN, TOO! This year's strategist Gary Hamel, Oracle CFO Jeff Henley and Sara Lee CFO Judy Spriser lead an all-star line-up. To date, I've resisted using too much influence from my short, unnoteworthy (but extremely lucky) career with the Raiders. However, one of my old teammates, Ted Hendricks, is going to join us during the exhibit hall time on the 25th. Come get your picture taken with a Hall-of-Famer and true legend of the game. Ask him about the time he rode a horse onto the practice field in Santa Rosa to John Madden's delight! Return to top. Visit to Indianapolis Chapter I had a great visit to the Indianapolis Chapter last week. The chapter conducted a PD session that consisted of a simulation of intercultural communications challenges. We broke up into three groups, were assigned a unique culture and discussed its characteristics. Then we mixed the groups up and had to address a typical corporate problem (new plant location and employee relocation/displacement issues). The very next day, I had a three-hour meeting with a delegation from the Chinese Accounting Standards Committee, translator and all. The training came in handy. Thanks to our leaders in Indianapolis for a great session. Bill Petrovic, VP & Treasurer of Roche Diagnostics is the program chair, and Michael Risdon, Senior EVP, the Cumbernaul Group is the chapter president Return to top. E&Y Tax Legislative Summary The newest tax update from E&Y reviews the targeted tax cuts expected in the President's State of the Union on January 27. Here's the link: http://www.financialexecutives.org/newsletters/eytax/TLSJan10.doc. Return to top. Member News Congratulations to Thomas M. Schoewe, who will begin his new position as executive vice president and chief financial officer of Wal-Mart Stores, Inc. on Jan. 31, 2000. Another member moved into Tom's former position at Black & Decker when Michael D. Mangan was named senior vice president and chief financial officer for Black & Decker. Great moves for both members. Way to go! In other member news, Keith Sherin, CFO of General Electric, and Don Peterson, CFO of Lucent Technologies, recently became members of FEI. Both companies have a great history of support and participation in our organization. Thanks! Return to top. Financial Research Online Our affiliate, Financial Executives Research Foundation, has upgraded its web site. Take a look at www.ferf.org. You can access the most recent studies and executive reports as well as the newest project descriptions. New items in January include: A bibliography by Joe San Miguel and John Shank to accompany their project "Assessing the Strategic Impact of Enterprise Resource Planning (ERP) Systems" The chance to participate in research online by spending 30 minutes analyzing your company's 1998 and 1988 annual reports, completing a spreadsheet and submitting it by e-mail. Summary results will be continuously updated! Send Bob Colson your research concerns and questions at rcolson@financialexecutives.org. Also participate in FERF's Balanced Scorecard project by downloading a short survey, which aims to identify practices for using the balanced scorecard concept. Survey participants will receive a free copy of the complete study. Return to top. Shop Online and Support FEI Here's a unique way to support FEI whenever you are cyber-shopping at namebrands like Borders, Land's End, Toys-R-Us, Brooks Brothers and more. Visit our private online shopping village at HomeGalleria.com. Access the FEI shopping village from the HomeGalleria icon at the bottom of our web page at www.financialexecutives.org. All of your purchases help support our organization. FYI, HomeGalleria does not use, sell or share any consumer information. Return to top. New Member Congratulations to Anthony Calleja, VP, Finance at bamboo.com in Palo Alto, CA, and to William Pye, VP and Financial Controller at New York Life International, Inc., in New York. Return to top. Job Posting SVP/CFO - A mutual holding company headquartered in northeastern Pennsylvania is seeking a SVP/CFO. A minimum of 10 years of progressive experience in the insurance industry is required with a minimum of five years at the CFO level. The successful candidate will have in-depth knowledge of GAAP and SAP. IPO experience is a requirement. Please respond to Terri Sanders, Sanders Consulting Inc., e-mail: ExecSch99@aol.com. To view additional jobs, please visit the FEI Careers Center at http://www.financialexecutives.org/services4.htm Return to top. That's all for now, Phil Livingston plivingston@financialexecutives.org

Instructions for Managing Your Subscription to FEI Express:
To un-subscribe from FEI Express, simply send an e-mail to MailManager@feiexpress.financialexecutives.org with "unsubscribe" typed in the subject field.

To subscribe for an additional e-mail address, visit our website at http://www.financialexecutives.org or send an email to MailManager@feiexpress.financialexecutives.org with the message "subscribe" in the subject field.

To change the address at which you receive FEI Express, unsubscribe using the method described above, and then subscribe on the home page of the FEI Website.