At its first meeting on November 13, 2002, the Public Company Accounting Oversight Board (PCAOB) stopped short of temporarily endorsing audit standards issued by the American Institute of CPAs (AICPA). The meeting was chaired by William Webster, even though he has already resigned from his position as Chairman on a permanent basis.
Mr. Webster suggested the board consider adopting the existing standards on an interim basis. But some felt this would send a message that they supported the status quo instead of reform. Board member Willis Gradison said the board concluded it needs legal advice on whether the AICPA's standards remain in effect. However, Chuck Landes, director, AICPA Audit & Attest Team, agreed with others who point out there should be no confusion among practitioners. "Auditors of public companies need to follow Statements on Auditing Standards as promulgated by the Auditing Standards Board," he explained, "until such time as the PCAOB decides otherwise."
Mr. Landes went on to add that the ASB looks forward to meeting with the members of the PCAOB, at their convenience, to review with them ASB's processes and transparency in setting auditing standards. Says Mr. Landes, "Just as we worked cooperatively with the POB, we are committed to working cooperatively with the PCAOB in setting the highest quality auditing standards."
"Groundhog Day" For SEC Chairman Pitt
Other topics discussed at the meeting included operating procedures, office facilities, and the task of finding a replacement for Mr. Webster. The board said it is seeking office space for about 50 people. It plans to have its headquarters in Washington with an office in New York. It agreed to leave the decision of whether or not to appoint an acting chairman to the Securities and Exchange Commission (SEC).
So outgoing SEC Chairman Harvey Pitt awoke the next morning to find himself once again saddled with the task of naming someone to head the new accounting oversight board. Although he has officially resigned as SEC Chairman, Mr. Pitt will be staying on as Chairman until a successor can be named. In this capacity, he also still faces the task of selecting a permanent head of PCAOB, which could be done by consensus of all the commissioners. In some ways, he must feel like the lead character in a movie reliving "Groundhog Day" over and over.
The first meeting of the PCAOB was held behind closed doors. Future meetings may be open to public observation.