FEI Emphasizes Financial Literacy; Fraud Deterrence & Detection
In conjunction with its 80th anniversary, as announced at this year's leadership Summit conference taking place this week in Phoenix, Arizona Financial Executives International is placing an emphasis on financial literacy and fraud deterrence and detection. Included among the program initiatives in this area are the relaunch of an updated version of the FEI Financial Literacy Quiz, and the co-sponsorship with the Center for Audit Quality (CAQ) of a series of Executive Breakfast Workshops on Detecting and Deterring Financial Reporting Fraud.
Senior Level Faculty Lead Anti-Fraud Workshops
Dates announced for the FEI-CAQ executive breakfasts include May 10 (Chicago), May 16 (Boston), May 25 (Dallas), and June 14 (San Francisco). Faculty leading the workshops include FEI President and CEO Marie N. Hollein, CAQ Executive Director Cindy Fornelli, and the following senior financial executives and auditors: Evelyn Angelle, Senior Vice President and Chief Accounting Officer, Halliburton Company, David F. Bond, Senior Vice President, Finance and Control, Safeway Inc., Bryan Jones, Partner Forensic Services, KPMG LLP, Graham Murphy, Partner, Forensic Services, KPMG, LLP, Kristin Rivera, Partner Forensic Services, PwC, LLP, Bob Strasser, Partner, BDO Seidmam, LLP, and John Wozniak, Corporate Vice President and Chief Accounting Officer, Motorola Solutions. The cost to attend one of the breakfasts is $95; FEI members attend for free. Advance registration is required. Not an FEI member? Check out FEI's 80/80/80 discount program.
History of the FEI Financial Literacy Quiz
The first edition of the FEI Financial Literacy Quiz was developed in the 1990's by Phil Livingston, then-President and CEO of FEI (and now Chief Executive Officer for the Marketing and Business Solutions organization of LexisNexis in the U.S.,); Professor Emeritus Roman Weil (then a Professor at the University of Chicago, now Professor Emeritus, and visiting professor at NYU's Stern School of Business; publications); and John Stewart, then-partner with audit firm Arthur Andersen (and now a managing director of the consulting firm, Financial Reporting Advisors, LLC). The quiz was launched in the period immediately preceding the Sarbanes-Oxley Act, when there was increasing focus on the need to strengthen audit committees, and the primary audience for the quiz as originally constructed was for audit committee members.
The 2nd Edition of the quiz, published this week, was updated by FEI staff to include new questions in a number of areas, including financial reporting, auditing, recent legislation, fraud prevention and detection. FEI acknowledges the assistance of other partners in the CAQ-FEI-IIA-NACD Anti-Fraud Initiative in informally reviewing and commenting on drafts of the 2nd edition.
Quiz is a Starting Point, Not a Destination
To provide context on what the FEI Financial Literacy Quiz is - and is not - the Introduction to the quiz notes: This instructional quiz, developed by Financial Executives International, does not provide a certification by FEI or any other body. The questions in this quiz address a sample of basic elements of the financial reporting process and oversight of finance issues... [it] is not meant to provide a complete picture of one’s financial reporting literacy or qualifications to perform a particular job. Rather, the questions in this quiz are meant to highlight a variety of areas such that, if knowledge gaps are identified, the individual taking the quiz can seek further information on, individually, or potentially through an organization they work for, serve on the board of directors of, or through educational opportunities offered by professional associations such as FEI....Following are some of the areas covered in this Second Edition of the FEI Financial Literacy Quiz: financial reporting and auditing, governance, regulation, legislation and standard-setting; fraud prevention and detection, and private companies.
My Two Cents: Raising Awareness
Allow me to add 'my two cents' (please see the disclaimer on the right side of this blog). The true value of the FEI Financial Literacy Quiz is not in what it proves you are - for it does not 'prove' or 'certify' anything, as carefully noted in the Introduction to the quiz excerpted above. Rather, the value of the quiz is to raise awareness - as a relatively quick identifier of some areas where the person taking the quiz may have some knowledge gaps. Indeed, in some cases, the gaps shown by the quiz could simply be the tip of the iceberg, given the depth and breadth of knowledge required to be 'financially literate' in the role of financial executive, internal or external auditor, audit committee member, or investor.
FEI stands ready to assist its members (and nonmembers) by providing a variety of educational offerings in the form of conferences and webcasts, local chapter events, national advocacy and accounting policy committees, and materials published in our magazine, Financial Executive, and by our research affiliate, the Financial Executives Research Foundation (FERF).
The above-mentioned breakfast series on fraud deterrence and detection, cosponsored by FEI and the CAQ, are one example of these initiatives. On the anti-fraud front, additional publications and programs are also forthcoming from members of the CAQ-FEI-IIA-NACD Anti-Fraud Initiative, both individually and collectively. One additional point: the FEI Financial Literacy Quiz is not designed to identify or certify anyone as a 'financial expert.' (Questions about the definition, stock exchange listing and related regulatory requirements for, and qualifications and performance of 'audit committee financial experts' in practice, were raised by various members of the Public Company Accounting Oversight Board's Standing Advisory Group during the PCAOB SAG's March 24 Q&A session with the COSO Chairman.)
Once again, the main purpose of the FEI Financial Literacy Quiz is to raise awareness, not to certify or provide an indepth training experience per se, but to encourage participation in an knowledge-seeking exercise through a relatively quick 'quiz,' rather than trying to be all-encompassing. Some may argue that even the CPA exam (or other professional exam, such as the Bar Exam) cannot cover 100% of the knowledge that a person needs to qualify as a CPA (or other professional); thus, the purpose of this quiz is to raise awareness and encourage people to fill in identified knowledge gaps, through participating in educational programs offered by FEI or other professional associations, through programs offered by universities or online training, (see also programs offered by FEI's Strategic Partners) or by other means. So, what have you got to lose? Take the quiz!