Progress at PCAOB; Congress Drops PCAOB Salary Caps
Charles Niemeier, the interim chairman of the Public Company Accounting Oversight Board, responded to an article in Wednesday’s Financial Times that the Board was falling behind its schedule to fully review the Big Four accounting firms by the end of 2003.
"To fall behind, you have to have something to fall behind from .... We never had exactly clear what we were going to do in inspections," he told Reuters in responding to the article.
The PCAOB is planning thorough reviews of the Big Four firms, but has asked the AICPA to continue its peer review process until the Board can get up and running. Mr. Niemeier has indicated that the Board will conduct reviews of all four “as much . . . as possible” this year.
Congress Drops Proposal to Cap Salaries
In late January 2003, Congress proposed a salary cap for PCAOB Board members, who had vote themselves annual salaries of $452,000 each – salaries that would encourage top talent on par with salaries of Board members of the Financial Accounting Standards Board. Congress felt that the Board, which is under the supervision of the SEC – a government agency – shouldn’t earn more than the President of the United States.
Outgoing SEC Chairman Harvey Pitt defended the salaries in an interview on CNN's Moneyline earlier this week. "We want to get the best people to work for the accounting oversight board so the public will be protected,” said Pitt. As a result of Pitt’s and others’ defense of the salary levels, Congress has dropped their proposed amendment to cap the salaries and keeping them in line with comparable pay levels in the private sector. "It's out," said Rep. Michael Oxley, co-sponsor of the Sarbanes-Oxley Act that created the PCAOB.