Definition of financial expert
- Financial Expert is a term defined by the Sarbanes-Oxley legislation that was passed in 2003, which requires that least one member of the audit committees of boards of directors is a financial expert.
- Although the law issues guidelines for what a financial expert is, it is up to each board of directors to make a determination using five key qualities outlined in the law.
- A financial expert must:
1) Understand Generally Accepted Accounting Principles (GAAP) and financial statements;
2) Be experienced in preparing or auditing financial statements of comparable companies;
3) Have experience accounting for estimates, accruals, and reserves;
4) Understand internal accounting controls; and
5) Understand the functions of an audit committee.
6) Aware about the IFRS and Jordanian legislations.
