He tried and failed to save Andersen as an "audit-only" firm, but he might get his chance to decide the future for public accounting. It is reported that Paul Volcker is being actively considered for the chairperson's position on the new Public Company Accounting Oversight Board.
The SEC is expected to name the chairperson as well as the other four board members later this month. Two of the board members may be CPAs. It will be rather interesting to see how much influence the incoming chairperson has in selecting the other board members and who is named. Equally important is the make-up of the board. Will there be a CPA with auditing experience, someone representing investors, and someone from the business community?
The answers will come shortly and that will tell public accounting firms what kind of future they can expect.
I am concerned that Volcker will use the board as his personal bullying pulpit. The appointment would not be an indication of an independent board as some claim, but rather the installation of board with a chairperson who arrives with a preconceived notion of how public accounting firms should operate and that would be even more limiting than the provisions of the "Sarbanes-Oxley Act of 2002."
Oversight is fine, but what is not needed is a police-type, over-your-shoulder, I-am-going-to-tell-you-how-to-run-your-business mentality.
The reactions to the selection of the board members, especially the chairman, should be closely watched and I am not talking about the public politically correct statements made by the AICPA leadership.
Accountants of private companies are concerned about the possible cascading effect of Sarbanes-Oxley on their practices as various state accounting boards and state legislative bodies consider changes governing the compilation and review work of local public accounting firms. A proactive Public Company Accounting Oversight Board will only increase worries about continuing adverse cascading effects.
The good thing is there won't be a long wait. In a couple of weeks, accounting firms will know if they will have Volcker scrutinizing them for the next five years.
