Mark W. Olson, chairman of the Public Company Accounting Oversight Board (PCAOB) has resigned effective July 31, one year before his second term was due to end. Olson was appointed to his position in 2006 by Securities and Exchange Commission (SEC) Chairman Christopher Cox. Olson's replacement will be named by Mary Schapiro, current head of the SEC.
Olson said in an interview with The New York Times that he had intended to stay until his term expired in 2010, but that, "As I passed my 66th birthday, I began to think it was time to move away from an everyday C.E.O. responsibility." He said that Schapiro had not asked him to leave.
In a statement Schapiro said, "Mark has been an effective steward of the PCAOB and under his able leadership, the PCAOB has taken significant steps to improve auditor oversight."
AICPA President and CEO Barry Melancon said that Olson has been "fair and open, and committed to the mission of the PCAOB and public interest."
Olson was the second chairman of the PCAOB, which was established under the Sarbanes-Oxley Act of 2002. He succeeded William McDonough.
Two other board members have completed their two-year terms and will be replaced by Schapiro. One of the three appointments Shapiro will be making after consultation with the Board of Governors of the Federal Reserve System and the Secretary of the Treasury must be a certified public accountant. The Sarbanes-Oxley Act requires that two of the five Board members be or have been certified public accountants.
Under Olson's leadership, the PCAOB replaced Auditing Standard No. 2 with Auditing Standard No. 5 which was designed to emphasize internal controls risk and reduce the cost of PCAOB audits. Olson also tried to meet the requirement of the law that the PCAOB audit foreign firms whose securities trade in the U.S., but the board achieved only limited success. The European Commission has tried to block the audits, the Times reports.
"We have indicated we can be increasingly reliant" on other regulatory bodies, Olson said on Monday in his interview with the Times, "but the starting point has to be joint inspections, so we can get to know each other."
In addition to addressing audits of foreign firms, the new chairman will be confronted with a suit to be heard in the Supreme Court this fall that challenges the constitutionality of the PCAOB.