A Texas A&M International University faculty member and researcher has been quoted in USA Today for an article focusing on new targets for lawsuits emanating from corporate accounting disasters.
Dr. Kannan Rahunandan, Killam Professor of Accounting, was featured in a July 25 story by reporters Greg Farrell and Matt Krantz.
Farrell and Krantz' story focused on the growing trend of investors suing companies and their board of directors' audit committees in specific when company earnings dip.
Audit committees sign off on earning statements, in effect functioning as a check on the company's reporting methods and assuring that its accounting procedures are accurate and truthful. The authors of the article maintain that many committees are not prepared for the important task. They also charge that some committees do not include independent members -- members who have not been employed by the company or paid by them.
In the article, Dr. Rahunandan addresses loopholes within the listings requirements by the NASD, which directs the Nasdaq market. These loopholes allow companies to include board members that are not truly independent through exception clauses.
As investors continue to mount lawsuits, the authors contend that audit committees can no longer operate with a sense of immunity. Companies need to assure that their audit committees are up to their charge and perform same effectively and ethically.
The article can be viewed online by visiting http://www.usatoday.com/usatonline/20010725/3508709s.htm
Rahunandan, who joined the University faculty in 2000, holds his Ph.D. from the University of Iowa. His MBA is from the Indian Institute of Management in Calcutta and his B.E. is from the University of Madras, India. He is the Radcliffe Killam Distinguished Professor of Accounting for the Department of Accounting and Information Systems, College of Business Administration.
Prior to joining A&M international, he was a faculty member with the University of Massachusetts at Dartmouth and Bentley College.
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