Actually, these critics are joining my position. I knew from the beginning that Cox was pro-managers and anti-shareholders, and so I criticized his appointment.

President Bush appointed Cox chairman of the SEC on June 2, 2005. In Christopher Cox Doesn't Reside at Pooh Corner, published in June 2005, I said, "In a flash, the SEC will turn from a pro-investor agency to one that will oppose meaningful change. Managers will note the alteration and start 'managing earnings' as they did in the roaring 90s." That's precisely what happened in the financial industry and now we are paying for it.

I presented this analysis because Cox had a history of promoting lies and exaggerations in the financial statements instead of calling for truth and transparency when he was a member of the House of Representatives. Cox introduced into Congress the 1995 Private Securities Litigation Reform Act and the 1998 Securities Uniform Standards Act. The first bill made it more difficult for plaintiffs to file class action suits against business enterprises, corporate managers, and public auditors and curbed the awards when plaintiffs won. The second piece of legislation required class action lawsuits brought because of accounting issues to be filed in federal court. Because Congress made it much harder for plaintiffs to sue wayward managers, directors, and auditors and because it capped the awards, the Congress encouraged managers, directors, and auditors to pillage the rest of us, which in fact they proceeded to do.

When the FASB issued its proposal to eliminate pooling of interests and require purchase accounting for all business combinations, Representative Cox launched a bill to delay its implementation. Introduced on October 3, 2000, the so-called Fair Accounting for Intangibles Reexamination (FAIR) Act would require a research study to examine the effects of the proposed accounting rule. The purpose was to defer the accounting statement forever and thwart improved accounting.

When the FASB pushed through the expensing of stock options, Christopher Cox again attempted to derail the FASB. He and others introduced HR 1372 on March 20, 2003, entitled "Broad-Based Stock Option Plan Transparency Act." This bill would similarly delay implementation of any FASB promulgation while several research studies are carried out. The purpose again was to defer forever any accounting standard. The Congressman also demonstrated his ability to manipulate the English language by referring to this bill as a transparency act, when in fact the objective was to obscure any meaningful disclosure about the cost of stock options.

And he didn't disappoint us. During his tenure as SEC Chairman, Christopher Cox blunted any stockholder reforms, thus continuing the enervation of company owners. He promoted principles-based accounting so managers do not have to follow accounting rules and have more flexibility in manipulating their financial statements. SEC enforcements have not been rigorous because he wants to help his friends in corporate America. And when he had to enforce some rules because everybody was watching, he fined the firms (e.g., the SEC fined Freddie Mac $50 million) instead of the criminals who embezzled corporate funds. Or he gave them a slap on the wrist, such as Allied Capital, which had no fine whatsoever. And now when Lehman Brothers has declared bankruptcy, he is fighting the short sellers who helped expose the excesses at Lehman's, including the probable accounting frauds by that enterprise. He always chooses to support his buddies in corporate America and on Wall Street.

Of course, there is the problem of President Bush. He was foolish enough to appoint Christopher Cox. If Cox was gone, would Bush appoint someone of the stature of William Donaldson or would he appoint another Cox?

The two presidential candidates promise change, but that talk probably is just for public consumption. We have heard the rhetoric before and then became jaundiced by the practice. While I realize they have lots of important issues to discuss and debate, I do wonder how they view the SEC and who they would appoint to serve as chairman. Would they appoint somebody who would really serve the interests of investors or would they appoint a Cox-clone to serve the interests of managers?

This essay reflects the opinion of the author and not necessarily the opinion of The Pennsylvania State University.

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J. EDWARD KETZ is accounting professor at The Pennsylvania State University. Dr. Ketz's teaching and research interests focus on financial accounting, accounting information systems, and accounting ethics. He is the author of Hidden Financial Risk, which explores the causes of recent accounting scandals. He also has edited Accounting Ethics, a four-volume set that explores ethical thought in accounting since the Great Depression and across several countries. He is the co-author of a monograph, Fair Value Measurements: Valuation Principles and Auditing Techniques (with Mark Zyla, Managing Director, Acuitas, Inc.) to be published by BNA.