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$435,000 Oversight Positions Prove Tough to Fill Oct. 7, 2002 Securities and Exchange Commission chief Harvey Pitt faces a fast approaching Oct. 28 deadline to get the new accounting oversight panel in place, a deadline imposed by Congress through the Sarbanes-Oxley Act. While Pitt had expected the appointment of the five board members to be filled by September, that expectation has only proved hopeful. So why is it so difficult to fill the positions? The Public Company Accounting Oversight Board is not without candidates. In fact, over 400 people have been nominated. Members can be expected to be paid approximately what Financial Accounting Standards Board members are paid -- $435,000 -- and the chairman can expect a bit more. This far exceeds Pitt's $138,000 salary. However, one main obstacle appears to be finding the individual with the right qualifications who is also interested in the job. The long list of nominees include a wide range of individuals, from former CEO of Ernst & Young Philip A. Laskawy to Texas Board of Accountancy member K. Michael Conaway to Securities law professor Joel Seligman. The Board must include two certified public accountants. A shorter list names those in consideration for the role as chairman. To the disappointment of many, Former Federal Reserve chairman Paul A. Volcker, 75, declined the position because it would be too time-consuming and require that he give up other projects. Volcker was considered the top candidate due to his upstanding reputation and leadership in the accounting community. Chairman candidates that remain standing include John Biggs, TIAA-CREF chief and former Public Oversight Board member, Donald Kirk, former vice chairman of the POB and former FASB chairman, and Mary L. Schapiro, vice chairman of the NASD. Political divides appear to be another factor getting in the way of selecting members for the panel. When The New York Times reported on Sept. 30 that Biggs had been offered the position to lead the new panel, Pitt immediately released a statement denying the claim. Major accounting firms are among those who have expressed concerns that Biggs would impose restrictions that go beyond the law's requirements. The co-creator of the Sarbanes-Oxley Act, Republican Michael Oxley (Ohio), has also disagreed with the appointment of Biggs. According to a Wall Street Journal report Friday, October 4, Biggs may not be the "moderate person" they are looking for to fill the job. On the other hand, Democrats endorsed Biggs in a letter sent to the SEC Friday.If not political contention, the time commitment, as cited by Volcker, may be a deciding factor for nominees. Also noteworthy, conflicts of interest would have to be absolved, requiring members to resign from public company boards. Regardless of the challenges ahead for the SEC as it forms a panel of esteemed professionals, the Public Company Accounting Oversight Board should be formed come Oct. 28. SmartPros will keep you posted on further developments. Was this information helpful? Please rate this article in the box below or write to editor@smartpros.com |
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