Academic journal article Journal of Accountancy
What a Governance Referee Thinks
Robert Roath, CPA and former CFO of RJR Nabisco, is an independent board member and chairman of audit committees for two distinctly different businesses. Interdigital Communication Corp. is a high-tech Nasdaq telecommunications company with $1 billion in market capitalization, and Standard Parking is a Nasdaq service-based company with about $165 million in market capitalization. The former designs and provides advanced wireless technologies; the latter is a cash business providing management for facilities in hundreds of U.S. cities.
Roath says the rules for obtaining CPA services are evolving as companies implement Sarbanes-Oxley. "It's causing some confusion," he says, "but it will get easier as the rules settle down and there is experience to build upon." Under the new regulations the committees Roath sits on have shifted some CPA services away from their traditional accounting firm. "Our staff have excellent public backgrounds, but it's very difficult to stay current on all aspects of accounting and reporting" he says. One firm helps sort out the nuances of accounting rules and regulations and general compliance, and another helps with IT compliance reviews.
To augment the internal staff, the Interdigital audit committee chose Grant Thornton to assist in the review and documentation of internal accounting controls. The committee asked the firm to bid based on its general reputation and prior working relationships. All the independent directors sat on the committee.
Standard Parking is newly public, having completed a successful IPO last May. The company has a strong control orientation and has embraced the new rules for compliance. "Quite possibly they will be able to do this without additional outside resources. It's a myth that a small company cannot deal with these laws," says Roath, referring to the idea that Sarbanes-Oxley will inhibit small private companies from going public. …