SEC Taps Audit Oversight Chief

Ending a year and a half of limbo at the Public Company Accounting Oversight Board, the SEC's Mary Schapiro announces a new PCAOB chair and the filling of two board slots.

Securities and Exchange Commission chairman Mary Schapiro ended a lengthy period of uncertainty regarding the Public Company Accounting Oversight Board when she announced on Friday that the SEC has appointed James Doty, a former SEC general counsel, as PCAOB chairman. In Doty, the accounting overseer will have its first permanent chairman since Mark Olson stepped down from the post in July 2009. Schapiro also announced that Jay Hanson and Lewis Ferguson would become board members.

Doty replaces Daniel Goelzer, who has served as acting chairman of the PCAOB since August 2009 and will continue as a board member. Hanson, an accounting-standards expert whose name is likely to be familiar to CFO readers, and Ferguson, a Washington securities lawyer, will replace Charles Niemeier and William Gradison, whose terms have expired.

Currently a partner at Baker Botts in Washington, Doty has represented clients on securities-law matters and advised boards and audit committees on problems arising under the Sarbanes-Oxley Act. He served as the SEC’s general counsel from 1990 to 1992.

Hanson, a partner at McGladrey & Pullen and leader of the audit firm’s accounting-standards group, has been with the firm for more than 30 years. He is a member of the Emerging Issues Task Force of the Financial Accounting Standards Board and chairman of the Financial Reporting Executive Committee of the American Institute of Certified Public Accountants.

Ferguson, a partner at Gibson, Dunn & Crutcher in Washington, specializes in securities deals and disclosures and represents audit committees and auditors. Before joining the firm, Ferguson served for more than three years as the first general counsel of the PCAOB.

Last June the PCAOB dodged a bullet when the U.S. Supreme Court issued a ruling that preserved the constitutional legitimacy of the board, which for years had been under legal attack. In its ruling, the court tweaked a part of Sarbox regarding the board’s makeup, but decided not to open up the entire 2002 law to scrutiny.

To fix what the majority of the court thought was a discrepancy in the law, the judges ruled that board members should be subject to at-will removal by their overseers, the SEC. Previously, the SEC could fire board members only for cause.

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