Absent the traditional fanfare that usually accompanies any notable change on Capitol Hill, I wonder if many folks in the profession were aware that the House Financial Services Committee has quietly assumed sole oversight of the Financial Accounting Standards Board. With the exception of a mention in the Congressional Record and what basically amounted to somewhat longer agate in several national dailies and wire services, the change - which has the potential to greatly impact future rulings from the Norwalk, Conn.-based standard-setter - drew about as much attention as a suggestive bathing suit in St. Tropez.

But first, a little background. Seems oversight of FASB, along with electronic trading outlets, was, for four years, shared between the Financial Services Committee and the Energy and Commerce Committee.

That co-responsibility was outlined in a January 2001 memorandum of understanding between Financial Services Committee chair Michael Oxley, R-Ohio, and Energy and Commerce Committee chair Rep. W.J. "Billy" Tauzin, R-La., who is now retired.

This compromise apparently had been brokered after GOP lawmakers reformatted what was the former House Banking Committee into what is now the HFSC and, in the process, gave it jurisdiction over the stock markets, the Securities and Exchange Commission and all that is accounting. However, Tauzin remained adamant that his committee retain oversight of FASB, and thus the reason for said memorandum. How would you have liked to have listened in on those negotiations?

Oxley, chairman of the Financial Services Committee was - as most already know - the co-author of the landmark Sarbanes-Oxley Act of 2002. Some wags in the profession insist on referring to SOX as the Sarbanes Bill, because, they claim, Sen. Paul Sarbanes, D-Md., chairman of the Senate Banking Committee, was responsible for most of the regulatory "teeth" in SOX.

That came in stark contrast to Oxley's initial corporate reform bill, which several people familiar with the situation told me was so soft you could essentially jump out of a plane without a parachute and land on it.

In a surprise to exactly no one, Oxley's version was preferred by many of the global audit firms and the American Institute of CPAs. And it's also no secret that the Ohio lawmaker was one of the key opponents of the original auditor independence reform proposals in the mid-to-late 1990s, while both he and Tauzin were staunch opponents of FASB's proposal several years ago to begin treating stock options as an expense.

But jumping forward to more contemporary developments, as in just last summer, FSC member Rep. Richard Baker, R-La., easily pushed through H.R. 3574, the Employee Stock Option Reform Act, a watered-down version of FASB's options expensing rule that basically entails expensing options just for a company's top five employees.

FASB's stock option expensing rule is slated to take effect in June, and has attracted a firestorm of opposition, particularly from the technology sector.

Oxley hasn't indicated whether he'll revisit options expensing this year. But there's a chance that more than a few folks up in Connecticut are holding their collective breath.

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