SEC Narrows Search For Chair of New Oversight Board

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.

-Rosemary Schlank

You may like these other stories...

The Public Company Accounting Oversight Board (PCAOB) on Tuesday adopted a new auditing standard and amendments in three areas of the audit that could pose an increased risk of material misstatement in company financial...
Read more from Larry Perry here and in the Today’s World of Audits archive.In my last article, I presented an overview of one of the first steps in the preplanning phase of an audit engagement: reviewing prior year...
Read more from Larry Perry here and in the Today’s World of Audits archive.AU-C Section 800, Special Considerations—Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks (SPFs),...

Already a member? log in here.

Upcoming CPE Webinars

Oct 9In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards.
Oct 15This webinar presents the requirements of AU-C 600, Audits of Group Financial Statements (Including the Work of Component Auditors).
Oct 21Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience’s communication style.
Oct 23Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.