SERVICES FOR AUDIT COMMITTEES OF PUBLIC COMPANIES

Audit Committee Support Services

On December 15, 1999, the Commission adopted new rules to improve public disclosure about the functioning of corporate audit committees and to enhance the reliability and credibility of financial statements of public companies. We have developed services to help the Audit Committee meet these requirements including the following:

• Preparation and maintenance of the Audit Committee Charter
• Draft the Audit Committee Report included in the Company’s proxy statement.
• Assist the Audit Committee determine the qualifications of Independent Auditors, Fees, and the sufficiency of Audit Procedures.
• Assist the Audit Committee discuss certain matters in SAS No. 61, and review independence matters with the Independent Auditors.
• Perform agreed upon procedures to assist the audit committee evaluate and conclude on the audited financial statements and other disclosures made by the Company to allow the Audit Committee recommend to the Board that the financial statements be included in the 10-K.
• Assist in determination that the “safe harbors” to protect the company and directors from certain liabilities under federal securities laws have been met.

Internal Audit Programs

The internal audit “outsource” program is an in-depth review of operations and internal controls, is a cost effective alternative to hiring a full-time internal auditor, and is specifically tailored to meet the needs of your Company. The program could include compliance with policies and procedures, internal control activities (including tests of controls), review of risk management, review of revenue recognition, review of related party transactions or conflicts of interest, review of significant or unusual transactions, and other areas considered significant by the Audit Committee.

Agreed Upon Procedures Reports
We can provide engagements to perform procedures agreed to by the Audit Committee or Board that can cover a wide range of issues facing Public companies including fraud detection, expenses, reconciliations, regulatory compliance, account verification, and other procedures.

General Responsibilities of the Audit Committee

The Audit committee is responsible for insuring that the board of directors and management of the Company meet all required financial reporting objectives and maintain internal control practices and procedures sufficient to safeguard members’ assets. To fulfill this responsibility, the Audit committee must determine whether:

a. Internal controls are established and effectively maintained.

b. The Company’s accounting records and financial reports are promptly prepared and accurately reflect the results of operations.

c. The plans, policies and control procedures established by the board are properly administered and conducted throughout the Company.

d. Established policies and control procedures are sufficient to adequately safeguard against error, conflict of interest, self-dealing and fraud.

Our firm has the services and resources to assist Companies of all sizes meet these responsibilities.

Summary of SEC Requirements for Audit Committees

Executive Summary

The SEC adopted new rules and amendments to current rules to improve disclosure relating to the functioning of corporate audit committees and to enhance the reliability and credibility of financial statements of public companies. The new rules and amendments are based in large measure on recommendations made by the Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees (the "Blue Ribbon Committee"). The new rules and amendments have been adopted in most respects as proposed, with modifications discussed below.

Audit committees play a critical role in the financial reporting system by overseeing and monitoring management's and the independent auditors' participation in the financial reporting process. We have seen a number of significant changes in our markets, such as technological developments and increasing pressure on companies to meet earnings expectations, that make it ever more important for the financial reporting process to remain disciplined and credible. We believe that additional disclosures about a company's audit committee and its interaction with the company's auditors and management will promote investor confidence in the integrity of the financial reporting process. In addition, increasing the level of scrutiny by independent auditors of companies' quarterly financial statements should lead to fewer year-end adjustments, and, therefore, more reliable financial information about companies throughout the reporting year.

Accordingly, the new rules and amendments:

· require that companies' independent auditors review the financial information included in the companies' Quarterly Reports on Form 10-Q or 10-QSB prior to the companies filing such reports with the Commission;

• extend the requirements of Item 302(a) of Regulation S-K (requiring at fiscal year end appropriate reconciliations and descriptions of any adjustments to the quarterly information previously reported in a Form 10-Q for any quarter) to a wider range of companies;
• require that companies include reports of their audit committees in their proxy statements; in the report, the audit committee must state whether the audit committee has: (i) reviewed and discussed the audited financial statements with management; (ii) discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61, as may be modified or supplemented; and (iii) received from the auditors disclosures regarding the auditors' independence required by Independence Standards Board Standard No. 1, as may be modified or supplemented, and discussed with the auditors the auditors' independence;

• require that the report of the audit committee also include a statement by the audit committee whether, based on the review and discussions noted above, the audit committee recommended to the Board of Directors that the audited financial statements be included in the company's Annual Report on Form 10-K or 10-KSB (as applicable) for the last fiscal year for filing with the Commission;
• require that companies disclose in their proxy statements whether their Board of Directors has adopted a written charter for the audit committee, and if so, include a copy of the charter as an appendix to the company's proxy statements at least once every three years;
• require that companies, including small business issuers, whose securities are quoted on Nasdaq or listed on the American Stock Exchange ("AMEX") or New York Stock Exchange ("NYSE"), disclose in their proxy statements whether the audit committee members are "independent" as defined in the applicable listing standards, and disclose certain information regarding any director on the audit committee who is not "independent"(see Section III.D below); require that companies, including small business issuers, whose securities are not quoted on Nasdaq or listed on the AMEX or NYSE disclose in their proxy statements whether, if they have an audit committee, the members are "independent," as defined in the NASD's, AMEX's or NYSE's listing standards, and which definition was used; and
• provide "safe harbors" for the new proxy statement disclosures to protect companies and their directors from certain liabilities under the federal securities laws.

To provide companies with the opportunity to evaluate their compliance with the revised listing standards of the NASD, AMEX, and NYSE and to prepare for the new disclosure requirements, we are providing transition periods for compliance with the new requirements.

Compliance Dates

Several commenters requested that we provide a transition period to allow companies time to consider the rules and to revise, if necessary, any of their procedures. We agree, and have provided a transition period for compliance with the new requirements. Registrants must obtain reviews of interim financial information by their independent auditors starting with their Forms 10-Q or 10-QSB to be filed for fiscal quarters ending on or after March 15, 2000. Registrants must comply with the new proxy and information disclosure requirements (e.g., the requirement to include a report of their audit committee in their proxy statements, provide disclosures regarding the independence of their audit committee members, and attach a copy of their audit committee's charter) for all proxy and information statements relating to votes of shareholders occurring after December 15, 2000. Companies who become subject to Item 302(a) as a result of today's amendments must comply with its requirements after December 15, 2000. Registrants voluntarily may comply with any of the new requirements prior to the compliance dates.