A study by Roman L. Weil, a professor at the University of Chicago, concludes that shareholders benefit from a company having a more financially literate audit committee.

As part of the study, Weil rated the financial literacy of audit committees at the 200 largest and the 100 smallest companies in the Fortune 1000 list, and tracked the ratings for 2000 and 2003 to see how the ratings changed. He also tracked stock prices for the 300 companies during the same period. From the beginning of 2000 to the end of 2003, the study found that the companies that increased their audit committee ratings experienced a stock price increase of 4,6 percent more per year than companies whose audit committee ratings did not increase.

A copy of the article, "Audit Committee Financial Literacy: A Work In Progress," is available on the University of Chicago Web Site:

http://gsb.uchicago.edu

Once at the site, select "Faculty" on the left, select "faculty pages," select Roman L. Weil, select "view unrestricted research," and select the second item.