When Mark Olson starts his new job as chairman of the Public Company Accounting Oversight Board in July, his commute into work won't be all that much different from his most recent gig - a few blocks away at the Federal Reserve Board.But there's little doubt that the course he'll be setting with the accounting firm regulator will be markedly different from his duties over the last five years as a Fed governor.

At the nearly 100-year-old Fed, Olson regularly voted on interest rates and played a role in setting monetary and economic policy, working as part of a system that has historically operated behind closed doors. At the PCAOB, Olson has said that he expects to play the role of regulator first, and enforcer only when need be, as he oversees a young institution that is expected to carry out its work as transparently as possible.

Announcing the selection of Olson, Securities and Exchange Chairman Christopher Cox said that Olson's experience as a central banker, his background in securities law, his expertise as a partner at Ernst & Young LLP, and his time as a bank president made him the perfect candidate for the role.

Dennis R. Beresford, former chairman of the Financial Accounting Standards Board and now an accounting professor at the University of Georgia, noted that Olson's background is fairly similar to that of William McDonough, the PCAOB's first steady chairman.

"I think he has an ideal background," Beresford said. "He's got a lot of congressional experience and a lot of management experience. He knows enough about accounting that he's not going to have too steep a learning curve. And he's sufficiently independent to be credible."

It took the SEC nearly nine months to find a successor to McDonough, who first announced that he would be leaving the position last September. Olson steps in at a politically perilous time for the board -many business interests are forcefully lobbying for a repeal of Sarbanes-Oxley's internal controls provisions for smaller public companies, and a lawsuit has been filed questioning the PCAOB's constitutionality.

Olson, 63, joined the Federal Reserve in December 2001. In addition to his policy-making duties as a governor, he has served as the administrative governor since August 2002, a role in which he was responsible for the management of the Federal Reserve Board.

Beresford said that he sees two major challenges on the horizon for Olson - how to make the audit of internal controls provisions less costly, but still meaningful; and while the inspections process seems to be working, how to make the audits of firms still relevant.

"The reports are taking so long to get out to the public, they almost seem a little irrelevant by the time they arrive," Beresford said.

As former chief accountant of the SEC, Donald Nicolaisen worked closely with the board in its infancy to implement the major provisions of SOX, before leaving last October to return to the private sector. He said that there's no doubt that Olson has a full plate in front of him, but said that he believes the new chairman is an excellent selection, with the added bonus of having worked for a Big Four firm.

"The board's in pretty good shape," said Nicolaisen. "What I think he needs to do is really make some noise around Standard No. 2 ... make sure it's really looked into and explored and dealt with so that everyone is confident that when the board does moves forward on those provisions, it's moving in the right direction."

Where he's coming from

Before joining the Fed, Olson served for a year as staff director of the U.S. Senate Securities Subcommittee of the Banking, Housing and Urban Affairs Committee, which oversees the SEC, accounting policy issues and the insurance industry. In E&Y's Washington office, Olson, who is not an accountant by trade, served as national director of the firm's regulatory consulting practice for the financial services industry.

Olson began his banking career in 1966 with First Bank System (now U.S. Bancorp) and was named an officer in 1969, going on to serve as the chief executive of several banks over the next two decades. He occasionally worked for then-Congressman Bill Frenzel, R-Minn., in the 1970s. From 1976 to 1988, Olson was president and chief executive of Security State Bank and served a one-year term as president of the American Bankers Association. It was only after selling his family's bank in the late 1980s that he returned to Washington for good.

Acting chair Bill Gradison, who had reportedly been interviewed for taking on the top slot permanently, will remain a member of the board. Cox singled out Gradison for leading "the effort to ensure that the application of Sarbanes-Oxley Section 404 to companies of all sizes will, in the near future, yield greater investor benefits at significantly lower cost."

The SEC also reappointed Kayla Gillan, one of the board's original five and former general counsel to the California Public Employees' Retirement System, for a term to end in 2007.

Olson's term, the longer of the two seats up for grabs, runs until 2010. The PCAOB's original members received staggered terms ranging from one to five years, so that only a single term would expire each year, and successors could receive full five-year terms.

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