Accounting Oversight Board Holds Second Meeting
The Public Company Accounting Oversight Board held it's second public meeting on February 4 as it begins settling in on its role of overseeing the implementation of several key provisions of the Sarbanes-Oxley Act.
Among the discussions at this week's meeting:
- Acting Chairman Charles Niemeier expressed confidence that the Board will be able to carry out its responsibilities by the April 26, 2003 deadline set by Congress.
- Roderick M. Hills, a former SEC chairman, encouraged the Board to further separate the influence that management has over a company's audit committee, so that the audit committee is truly independent.
- Katherine Schipper, a member of the FASB, disagreed with a proposal to have new regulations imposed in circumstances when the auditors feel that the publishing of financial reports are confusing to investors.
- The building of an online database and registration system for the 125,000 individuals and firms the Board will be dealing with will be the responsibility of Ray Scmidt, a former systems manager for Microstrategy, Inc. Mr. Schmidt has been hired on as Chief Information Officer, one of the few staff positions filled to date. (Microstrategy, Inc. and several top executives paid $11 million in fines in 2000 to settle accounting fraud charges with the SEC, but Mr. Schmidt was not among those involved.)
- Among other things, the database will be developed in-house, and will act as an early warning system by helping to identify specific risks in a company or industry.
The PCAOB is acting as a non-profit organization under the supervision of the SEC. It will ultimately be funded by fees collected from publicly traded companies.