(Should we start singing, "Big John, big John, big bad John"?)

 

The large accounting firms contributed tons of campaign money to members of Congress (more to the Republicans) and to President Bush. They extracted the appointment of Harvey Pitt, who serves their interests, as anybody who has read his 1997 book -- ironically titled Serving the Public Interest -- is aware. In Wonderland-fashion Pitt redefines public interest to mean customer satisfaction where the customer is management. This reveals their intentions to serve managers and not the investing public. Pitt used this foundation to justify the relaxation of independence rules, which of course is not exactly in the public interest.

 

With Pitt in the lead, the accounting leaders attempted to defuse reform talks after the demise of Enron. A reading of Pitt's speeches shortly after the December bankruptcy proves that. The collapse of WorldCom stopped them in their tracks, and they could not keep Congress from passing the Sarbanes-Oxley bill.

 

John Biggs would be a wonderful chairman of the new accounting board. His defects are that he is a man of integrity and has good ideas for truly reforming the system. In other words, he might actually do something.

 

(Chorus: "Big John, big John, big bad John.")

 

But the accounting profession is pressuring Pitt to provide his "quid" for their "quo" by naming pigeons to the accounting board. Unless Congress or the White House remove Pitt from office, we shall have from the very beginning a lame duck board.
 
(Chorus: "Big John, big John, big bad John.")

 

J. EDWARD KETZ is associate professor of accounting in Penn State's Smeal College of Business Administration. Check out his column, where you'll find more articles on controversial, cutting-edge topics.