Donald J. Kirk, former vice chairman of the Public Oversight Board (POB) and former chairman of the Financial Accounting Standards Board, has agreed to oversee the completion of the independence reviews of the Big Five accounting firms after the POB closes its doors on March 31, 2002.
The independence reviews have received Congressional and media attention recently, as outgoing POB Chairman Charles Bowsher urged the Securities and Exchange Commission (SEC) to insist on completion of these reviews by an independent party in accordance with decisions made under former SEC Chairman Arthur Levitt. Chairman Bowsher has testified that the AICPA, Big Five and current SEC officials have attempted to delay, avoid and/or water down the reviews.
Although the full fate of the reviews is not yet clear, the SEC has announced that the POB staff will continue to carry out their oversight functions under the terms of an agreement between the SEC and the Executive Committee of the SEC Practice Section of the American Institute of CPAs. SEC's announcement indicates the reviews will be completed by individuals chosen from the firms' peer reviewers.
The job of defining and supervising the work of the firms' peer reviewers will fall to the POB staff, who will be known as the Transition Oversight Staff (TOS) after March 31, 2002. Mr. Kirk's role will be to issue a report on whether the process followed in the reviews was properly defined, the work properly performed and the reviews appropriately assessed and reported by the TOS.
The TOS will be led by current POB Executive Director Jerry D. Sullivan.