Washington (Sept. 13, 2002) -- Former Federal Reserve chairman Paul A. Volcker, rumored as the Securities and Exchange Commission's favorite to head the Public Company Accounting Oversight Board, has rejected the job, according to media reports, leaving the question open as to who would head the newly created independent board.

With the October deadline looming for the selection of members for the PCAOB, whose creation was mandated by the Sarbanes-Oxley Act of 2002, speculation has run rampant among members of the profession and the media as to who will chair the watchdog body. Accounting firms that audit public companies will have to register with the board, which will have the power to set auditing, ethics, independence and quality standards. It will also have the power to inspect, investigate and discipline audit firms.

According to published reports, Volcker, who earlier this year led a fruitless effort to save Arthur Andersen by rebuilding it as an audit-only firm, may have passed up the position because of a requirement that the board members give up all other employment and business ands professional activities. Volcker serves as the chair of the International Accounting Standards Committee Foundation, the oversight body of the International Accounting Standards Board. A spokeswoman from Volcker's office said he had no comment.

Media reports have said that Volcker's pass leaves TIAA-CREF chairman and chief executive John H. Biggs at the top of the list of front runners for the job. TIAA-CREF executives had no comment. Other names mentioned as contenders for either chairmanship or membership on the board include J. Michael Cook, former chief executive of Deloitte & Touche; National Association of Securities Dealers vice chair Mary Shapiro; former SEC Commissioner Arthur Levitt; former chairman of the Financial Accounting Standards Board Dennis Beresford; former FASB chair Donald J. Kirk; and Joel Seligman, dean of Washington University School of Law in St. Louis and ethics committee member of the American Institute of CPAs.

Both Levitt and Beresford told Electronic Accountant that they are not candidates. Cook, who serves on the boards of several companies, told the Wall Street Journal that he "would be reluctant to make a full-time commitment, giving up all other business interests that it would require."

The SEC, which will work with the Federal Reserve and the Treasury to make the final selection of the five board members, declined comment on the matter. Spokeswoman Christi Harlan said the Commission received more than 350 applications for the board. While the SEC is said to be contemplating board offices in both Washington and New York, Harlan said no decision has yet been made.

--Melissa Klein

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