The U.S. Securities and Exchange Commission (SEC) has been trying to recruit a chairman for the new accounting oversight board created under the Sarbanes-Oxley Act of 2002. But it hasn't been easy. Yesterday, the Washington Post reported that forerunner Paul Volcker has all but turned down the post.
Mr. Volcker has many supporters who believe his reputation would help instill public confidence in the board. In addition to being a former Federal Reserve Chairman, Mr. Volcker serves as chairman of the Foundation that oversees the International Accounting Standards Board. He also led a spirited but unsuccessful effort earlier this year to reform Andersen and turn it into an audit-only model for the profession.
No public statement has been released, and some supporters are still hoping Mr. Volcker will take the helm of the new board. If he does not, the SEC needs to be prepared with a list of candidates who will be acceptable to all parties involved.
The candidates on the short list are said to include John Biggs, chairman and CEO of TIAA-CREF who served on the profession's Public Oversight Board (POB) before it disbanded, and Don Kirk, a former FASB Chairman who heads the Transition Oversight Board. Mr. Kirk's appointment would probably be more welcome to the accounting profession, but it is strongly opposed by consumer advocates. Mr. Biggs was critical of the former self-regulatory system, saying the major firms were unwilling to follow the POB's initiatives.
The big firms and American Institute of CPAs (AICPA) continue to keep silent regarding their preferences. AICPA CEO Barry Melancon told the Financial Times that AICPA has temporarily lost its ear at the SEC. "When the board starts operating, that's our opportunity to get a dialogue with the SEC," he explained. "Any attempts before in that area will actually be detrimental to that process." A lobbyist for the Big Four added, "One sure way to kill someone’s chances would be if we lobbied for them." ("U.S. Accountants Let Washington Decide," Financial Times, August 30, 2002.)
The deadline set by Congress for naming the members of the board is the end of October.