Greetings from Washington, D.C. The only good thing about travel is that I get to focus and write FEI Express! I'm writing this as we conclude our Committee on Corporate Reporting meeting. We had a good meeting with Lynn Turner of the SEC during the session, as FEI made our views known on a variety of subjects like the IASC, SAB 101, auditor independence and FAS 133. On the last subject, Lynn noted that they expect 9/30 10Qs to comment on the possible impact of 133 on financial statements. So heads up out there.

Now, I'm off to Las Vegas on Saturday for the FEI Technology Forum. We'll have some real-time highlights available next week. We've got a group of 20 members playing golf on Sunday. I should mention that I almost had my first hole-in-one last week, two inches away.

Auditor Independence
Our Committee on Corporate Reporting filed a response to the SEC's proposed auditor independence regulations. Our response is consistent with previous FEI positions, in that we believe that shareholders and the audit process are best served if a company can use its external auditor for other services like systems design, consulting and internal auditing services. Buying the best possible service at the cheapest cost benefits a far greater number of shareholders than the number of shareholders hurt by the rare occurrence of comprised independence. My own read of the situation is that the best practice among our companies is for the audit committee to review the assignment of non-audit work to the external auditors and approve it only if they are comfortable with the checks and balances in place. Some audit committees decide they want the additional check of a different firm doing this work. Some are comfortable with the controls in place. Either way, the audit committee is the place to make this decision, not the SEC.

Stock Buyback Work of the FEI Research Foundation
Dave Taggart, Treasurer of Coca-Cola, Kate Stevenson, Treasurer of Nortel Networks, Mike Conley, CFO of McDonalds and Jack Runkel, VP of Investor Relations of Heinz, all participated in a great discussion to assess the preliminary results of a study by Dr. Nikhil Varaiya of San Diego State University. The study measures the impact of buyback programs on stock price performance over time. It finds that the greatest benefits accrue to small cap companies that have been under-performers in recent periods. Both small cap and large cap companies that repurchase shares show substantial increases in earnings per share growth in the periods following the end of the repurchase program. This reflects the widely held belief that management of repurchasing firms recognize that investors are undervaluing their shares and potential performance. Click here to access more information.

Fintranet's Free Monthly Tool: Leasing Costs and Returns
Leasing can be a low-cost, effective method for a company to finance the use of assets and manage its balance sheet. Click here to learn more.

FASB Update
Regarding the business combination project in which the elimination of pooling is proposed, the Board is actively assessing the feasibility of leaving goodwill on the balance sheet subject to an annual impairment test. Companies may also have the option of amortizing it if they deem it appropriate. It is still early and it's a difficult issue, but this is an important development and desirable outcome to many. Stay tuned.

The consolidations project plods ahead with no similar breath of fresh thinking. Much to FEI's chagrin and after concerted efforts to communicate and get the Board to listen to reason, they appear to be forging ahead with the "control" framework and the presumptive situations that require consolidation. At this point, I encourage our members to really study the proposal, because it is going to change the entities you consolidate, and deals you're doing today need to be designed to take the new proposed rules into consideration. I think you'll find this to be another FAS 133 surprise when you assess the answers.

Annual Report to Members
FEI made significant progress toward its goal of creating a more dynamic and contemporary organization. Much has been accomplished: new applications reached an all-time high, our presence on the Internet is flourishing, attracting more and more finance executives, and we remain a respected, influential force on behalf of our members. Today FEI is poised to extend its reach, using technology to magnify our role as the voice of corporate finance. We've posted a short review of the year and our condensed financial statements for Fiscal 2000 on our web site at: http://www.financialexecutives.org/info/about8.cfm.

Corporate Governance
We had an interesting conference call this week with Tom Dougherty, Partner, Skadden-Arps. The subject was Hot Topics in Corporate Governance and Financial Reporting. One area we talked about was analyst forecasts and company involvement. Tom said that companies have three choices when an analyst sends a draft report to management for comment: 1) decline to review any part of the report; 2) review only the historical and factual information and correct it if needed; or 3) comment on the entire report including the analyst's forecast. Tom's suggestion (as is the recommendation of most conservative attorneys) is that companies should not review the reports at all. I pointed out the reality that surveys show again and again that most companies DO comment on the analyst projections. Further challenges of actual practice include the pressure to get analyst coverage and have the markets accurately value your stock. Tom pointed out that most people don't realize that the SEC considers any forecast that you have modified or changed in any way to be a forecast of the company. He recommends that companies not comment on the forecast of others. And if you are going to comment, publish your own forecast and take advantage of the safe harbor rules available by including the appropriate language with that forecast. A twice-a-year practice of giving a top line and EPS forecast with the safe harbor language would seem to be both a practical and smart thing to do. Avoiding other comments on the forecasts of analysts while correcting their historical information also seems to make sense. Some companies, like Pfizer, publish their own forecast on a periodic basis.

I'd love to hear your thoughts and practices on these views. Send me an e-mail at plivingston@financialexecutives.org. If I receive enough useful input, I'll report it in an upcoming Express.

Paul Volcker Dinner
I joined 25 members of our NY CFO Council for dinner this week with Paul Volcker, new trustee chairman of the International Accounting Standards Committee. He described the overall structure of the new body, the process the trustees are going through to select the standard-setting Board members, and their approach to raising the 10 million pounds needed to fund the first year of operation. Paul is personally chairing the fundraising committee and will be calling on the Big Five and corporations to provide financial support. Companies will probably be asked to contribute an amount relative to some size measure. He recognized the letter we sent him recently expressing concern over board member selection. In our conversation, we emphasized the need for the trustees to act independently and select strong board members that won't be bullied in the process. We also encouraged him to take whatever time is required in making the selections. He was very receptive to our input and queried our views on some specific candidates that have already surfaced.

The Wired Treasurer: Problem Solving on the Internet
The Internet is the critical medium that will change the future of treasury activities. But as the market continues to buzz about the Internet and its limitless possibilities, treasury professionals wonder, "How can this benefit my company?"

SEI Investments will present a teleconference (Sept. 28 at 12 noon ET) on a case study that investigates this convergence and will discuss its implications for the future. At the end of the session, participants will be able to:

• Understand how the Internet will "reinvent" treasury management in the near future.
• Identify concrete strategies for integrating Internet technology into daily treasury operations.
• Evaluate their progress in anticipating the emergence of Internet treasury.

To sign up for the teleconference, go to: http://www.financialexecutives.org/teleconf/upcoming_signup.cfm.

The New Economy and Financial Reporting
At the New York University Stern School, Professor Baruch Lev is performing a survey of financial officers regarding their views of the adequacy of the current financial reporting model. Both he and I would greatly appreciate it if you could jot your thoughts on this important issue and fax/email it back me at plivingston@financialexecutives.org or 973-898-9456. Baruch and one of his Ph.D. students are collaborating with FEI's Research Foundation on a project entitled "Quantitative Measures of the Quality of Financial Reporting." We hope to assess financial reporting in an objective, quantitative manner to provide some overall context for the future development of policy in the area. Baruch and I go way back to my days as a graduate student at UC Berkeley. His class in Financial Statement Analysis was standing room only on most days. Download the 1-page questionnaire at: http://www.financialexecutives.org/download/private/Baruch_Lev_Q.doc

E-Treasury Success Story from Treasurypoint.com
As you may know, SEI Investments is an FEI Strategic Partner. One of their web businesses, TreasuryPoint.com, recently launched a new treasury tool called the Optimizer. There's a compelling story on the site about how one of their clients used this new analytical tool to reduce risk and increase efficiency within their organization. I know many of you are looking for more time to focus on strategic initiatives instead of being weighed down by managing your treasury staff and operations. New types of tools like the Optimizer are great for just that. TreasuryPoint.com is offering a 30-day risk-free trial of the Optimizer. To read the full-text story about their client, follow this link.

Helping Small Businesses Grow Their Exports
TM OnLine is a searchable database of U.S. small businesses that wish to export their products, and for foreign firms and U.S businesses seeking U.S. business partners or suppliers for trade related activity. TM OnLine will also be used by the SBA to recruit for foreign trade missions and to provide time-sensitive trade leads to registered companies. To learn more, visit: http://www.sba.gov/tmonline.

Effect of Purchasing Cards and E-Purchasing
American Express and Ernst & Young recently released a study, The American Express Purchasing Process and Automation Study, that examines the processes companies use to purchase operating goods and services to determine their associated costs. The Process Study found that significant opportunities exist to lower these costs and also identified best-in-class practices to achieve cost savings.

Using on-site case studies of nine corporations, Ernst & Young benchmark data, and a market research survey of 50 companies, The Process Study found that companies can save up to 95% in purchasing process costs by integrating a purchasing card program with an e-purchasing system. This strategy, coupled with best-in-class policies, can reduce a company's purchasing process costs from an average of $90 to as little as $4.44 per transaction --providing savings in all steps of the purchasing process, including payment, reconciliation and data integration.

To learn more about Corporate Purchasing Card solutions and expense management strategies that can help save your company money, visit the American Express web site at http://www.americanexpress.com/corporateservices1. To have an American Express representative contact you, please visit http://www.americanexpress.com/solutions8

Live Audiocasts from FEI's Forum on Finance & Technology
Unable to attend the conference? The following presentations will be broadcast live and available via webcast (and archived after the event):

• Larry Downes, co-author of the best seller, Unleashing the Killer App, explores "killer apps" and how to be an exploiter rather than a victim.
  Tuesday, Sept. 19, 9-10 a.m. Pacific Time
• John Connors, CFO of Microsoft, presents, "Enabling Technologies for the Finance Function of the Future" offering insight on how Microsoft provides knowledge workers around the world with key business information such as revenue, people and cost metrics in real time.
  Tuesday, Sept, 19, 10:15-11:15 a.m. Pacific Time

To listen to the webcast, simply log on to: http://www.videonewswire.com/FINANCIAL/091900/. The events will be archived for 60 days.

New Member Welcome
Congratulations to Stephen Herzog, Treasurer, Ford Plantation, in Richmond Hill, GA, and to Michelle Book Gowdy, Controller, Triplett Companies, in Johnston, IA.

Job Posting: CFO
A highly recognized, profitable $200M division of a $1 billion nationally recognized corporation, experiencing its highest growth in the area of e-business, seeks a CFO. The individual will manage the strategic and tactical direction of the accounting/finance function. In addition, the person will be responsible for mergers, acquisitions and e-commerce start-ups. Must have 10-15 years of financial/accounting experience, including a minimum of 7 years in a management capacity, and strong M&A background in a global environment. The individual MUST come from a publishing, automotive or other related high tech industry. Please respond to Rick Taylor, Ratliff Taylor Executive Search, taylorr@ratliff-taylor.com.

To view more jobs, please visit the FEI Career Center.

That's all for now,