Regulatory agencies' revolving door drives imminent change.

• Author: DiFabio, Christine
• Position: Ben Bernanke joined Federal Reserve Board - William McDonough leaves Public Company Accounting Oversight Board - William Donaldson, Donald Nicolaisen and Alan Beller left Securities and Exchange Commission

Last year (2005) was one of tremendous change in the regulatory world--and not just for those in financial accounting and reporting rule-making. Beyond Sarbanes-Oxley year two, focus on the small business issuer and rating agency, tax and pension reform, an even more prevalent issue existed: the revolving door of leadership at key Washington agencies.

Departure announcements emanating from the U.S. Securities and Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB) kept everyone guessing as to who would be named next. And, looking back on the early months of this year, the trend continues for regulatory agencies.

Most recently, the appointment of Ben Bernanke as chairman of the Federal Reserve Board marked the replacement of the man who had monitored the U.S. economy since August 1987, former Chairman Alan Greenspan.

SEC, PCAOB Departures

Since the Sarbanes-Oxley Act was signed in 2002, the SEC has kept pace in implementing the requirements of the law. Heading this charge at the SEC were, in this author's opinion, three key individuals: former Chairman William Donaldson, former Chief Accountant Donald Nicolaisen and former Director of the Division of Corporation Finance Alan Beller.

In June 2005, Donaldson stepped down as chairman after a little over two years in the role; he was succeeded by the current chairman, Christopher Cox. Donald Nicolaisen departed in October 2005, and Alan Beller completed his final days with the commission in February. Securities lawyer John White was slated to join the SEC in late March as the new Director of Corporation Finance, but at this time the Chief Accountant position is still vacant. Scott Taub, former Deputy Chief Accountant, is currently acting as chief until a permanent head of the Office of the Chief Accountant is appointed.

But the jury is still out as to who will succeed Nicolaisen. There is little disagreement amongst preparers that Nicolaisen led with a balanced and fair hand during an incredibly challenging time for those in the financial accounting and reporting arena. There has been much speculation as to who will be named his replacement.

Will Chairman Cox select an individual with similar background to Nicolaisen--a public accountant and auditor? Or will he look to an individual in the preparer community--a controller of a major corporation or possibly a CFO of a smaller company?

Regardless of where the next chief comes from, there is no doubt that this...