The speech centered around the need for greater disclosure in the municipal bond markets, for which GASB sets accounting rules. Cox said the SEC will begin a review to ensure brokerage firm compliance of the rule that prohibits brokers from doing business with any municipality that it gives political donations to, a practice called "pay-to-play."

State and local governments voluntarily follow GASB's accounting rules. The board has no legal standing to take action against a violation, and the SEC has no authority to step in unless it suspects fraud.

Cox recommended that GASB be on equal footing as its sister body, the Financial Accounting Standards Board, which writes accounting rules that companies are required to follow.

With the passage of the Sarbanes-Oxley Act, the SEC was given oversight of FASB. Cox said he will ask Congress to consider giving his agency similar authority over GASB.

Also in his speech, Cox recommended that the government rulemaking board be funded independently so that it doesn't have to rely on donations. He also proposed to make governmental disclosure documents more accessible to investors -- perhaps via the free Internet-based SEC "Edgar" system currently used for securities -- and to improve public access to governmental accounting statements.

Sources: The New York Times, The Wall Street Journal