Public Oversight Board Elects New Leaders
The Public Oversight Board (POB) of the AICPA SEC Practice Section elected two experienced and respected executives to its highest offices in September.
Charles A. Bowsher, the POB’s new chairman, joined the board in 1997 after a 15-year term as Comptroller General of the United States and head of the GAO. Newly elected Vice-Chairman Donald J. Kirk was formerly chairman of FASB and has been a POB member since 1995. Bowsher and Kirk succeed incumbents A. A. Sommer Jr. and Melvin R. Laird, respectively.
An autonomous body, the POB oversees the SECPS’s self-regulatory programs and monitors developments that may affect the integrity of the audit process. One of its top initiatives is the Panel on Audit Effectiveness, formed last year at the request of SEC Chairman Arthur Levitt, who is concerned that auditors aren’t adequately scrutinizing corporate financial statements. Levitt says corporations often manipulate their financials in order to minimize volatility in income and earnings.
Bowsher, abroad and unavailable for comment as the JofA went to press, is expected to lead the board through gradual, but significant change during his term. Prior to becoming comptroller general, Bowsher was a partner at Arthur Andersen LLP. He also served with distinction as the U.S. Navy’s assistant secretary for financial management.
Michael A. Conway, chairman of the SECPS executive committee, noted Bowsher’s experience and the network of relationships he developed while serving as comptroller general. Conway feels that Bowsher’s background will enable him to forge an effective consensus inside the Beltway and elsewhere. “Chuck knows regulators, the government and Congress, so I think we’ll see some changes,” he said. But Conway doesn’t expect future modifications to take place any faster than they have traditionally. “The self-regulatory system will continue to evolve just as it has over the past 20 years,” he said. “So [any changes] will be evolutionary rather than revolutionary.” Conway added that, since Sommer was about to retire and Laird’s term was to expire in the near future, the board may have decided to fill both posts at the same time.
In an interview, Kirk expressed optimism because he believes the POB has what it needs to get the job done. “We’ve most certainly been adequately funded through the SECPS,” he said, noting that the POB’s funding includes the “not inconsequential” costs of the Panel on Audit Effectiveness. “And I think we have a fair amount of flexibility and freedom in how we carry out our responsibilities,” he added. “Nevertheless, we welcome any recommendations from the panel on ways to improve the POB’s operations and all aspects of the self-regulatory program.”
Kirk is now a consultant and an executive-in-residence at Columbia University’s Graduate School of Business. Prior to that, he was a partner at the former Price Waterhouse & Co. Kirk served in the U.S. Navy as an officer and pilot and received the AICPA’s highest award, the Gold Medal for Distinguished Service.
Barry Melancon, president of the AICPA, said that the board has been fortunate in the quality of its leadership. “Al Sommer has had an extraordinary effect on the profession and the POB. The public and the profession are indebted to him for his 13 years of service.” Melancon also praised the POB’s new leaders, who, he said, will advance the public interest through their extensive knowledge of the accounting profession and its responsibilities, coupled with their ability to foster clear communication on important issues.
What kinds of changes will the new POB leadership make, and will it continue in the steps of its predecessors? Although observers are hungry for details, they may have to be patient. “We probably won’t hear much for several weeks,” one said, looking forward to Bowsher’s return from abroad.