As I celebrated - or, perhaps more appropriately, marked - my fifth anniversary at the helm of Accounting Today, I harkened back to the myriad changes that have impacted the profession since I first sat behind my desk in 2000. I won't bore you with a rehash of the Enron/WorldCom scandals, the collapse of Andersen or the passage of Sarbanes-Oxley, as important as those are.
What I found interesting was that, with last month's confirmation of Rep. Christopher Cox as the new Securities and Exchange Commission chairman, the California lawmaker became the fourth head of that regulator during my tenure. (Actually there were six, if you count interim chairs.) That's a lot of disparate philosophies heading the investor protection agency over a five-year period.
In the fall of 2000, I watched as then-chair Arthur Levitt addressed attendees at the Fall Meeting of Council of the American Institute of CPAs in Las Vegas, at a time when his agency was attempting to implement bitterly contested auditor independence rules. I gauged that, for some at that session, Levitt's presence was as welcome as Fidel Castro on the floor of the New York Stock Exchange.
A year later, in the sweltering humidity and torrential rains that are Miami Beach in October, Harvey Pitt, the high-profile securities lawyer who succeeded Levitt, received a standing ovation from the Council members when he promised a "kinder, gentler" SEC. "I'm here to say those days are over," Pitt told swooning attendees, not having to explain his underlying reference to the Levitt era. But Pitt's tenure was marked by a series of missteps and questionable strategies, which did nothing to boost his credibility.
Pitt lasted 18 months before resigning, and when veteran financier William Donaldson was nominated, some regarded him as the ultimate insider who would offer little in terms of policing his former peers and Street colleagues. To the surprise of many, including me, he suddenly turned regulator and met such critical issues as late-trading scandals in the mutual fund industry head on - with stringent proposals and initiatives that often infuriated Wall Street. But he presided over a bitterly divided staff, a rift Cox will be forced to address. To show the extent of the divide, Donaldson even had to address the thorny issue of who would get an office with a window during a relocation.
The California Republican has pledged "continuity, clarity and consistency in the commission's rule-making and enforcement responsibilities." And for those in the profession who had been hoping for some relief or even rollback on Sarbanes-Oxley, Cox has declared that the sweeping corporate reform law was "absolutely necessary to bolster confidence in the integrity of our markets. Sarbanes-Oxley is now a pillar of our securities regulatory charter."
Now that's polite boilerplate during a confirmation process, but he faces some fairly large opening hurdles, one of them addressing the proposed merger of the NYSE and electronic trading concern Archipelago Holdings, and whether the exchange should spin off its regulatory arm. He must also mete out a calculated punishment for KPMG for its role in pushing aggressive tax shelters. The collapse of another global accounting firm would sort of be an inauspicious start to a difficult job.
I'll be watching the new chairman carefully, as I'm sure many in the profession will as well. By now it's become routine.
