The role of audit committees continues to be of importance to regulators, the accounting profession, and the business community. The New York Stock Exchange (NYSE) and the National Association of Securities Dealers (NASD) recently cosponsored a Blue Ribbon Committee to make recommendations for improving the effectiveness of audit committees (BRC 1999). The NYSE- and NASD-sponsored Blue Ribbon Committee’s first recommendation addresses the composition of audit
committees and calls for audit committee members to be independent of management.