PCAOB chairman shares perspectives on business—to be featured at members conference

Catalyst (Dublin, Ohio), March-April, 2004

William McDonough, chair of the Public Company Accounting Oversight Board (PCAOB), will be the featured speaker at this year's Members Summit June 15, 2003.

In January, McDonough spoke with the editorial staff at USA Today on a variety of issues impacting the business culture.

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Creation of the PCAOB

McDonough found it interesting that the public's anger was so great it was able to convince a conservative government to go against the commonly held belief that an unfettered market economy is best, and impose regulations on a previously self-regulated profession.

Goals of the PCAOB

Protecting the interests of the American people is at the heart of McDonough and the PCAOB. He is particularly focused on restoring the public's trust in the profession. While he is optimistic that the profession will take the lead, he is willing to force compliance if necessary. In his opinion, the latter is far from the ideal because it would be a slower, uglier process that could only further tarnish the public's perceptions of the financial markets.

How did things get out of hand?

First of all, McDonough cites the spike in executive compensation as the root of the corruption problem. Secondly, he cites impossible expectations that earnings could be predicted and that they needed to constantly rise. These expectations created unrealistic pressure, setting the stage for corruption.

To read the entire interview including comments about the mutual fund industry, stock options, and the Big Four, go to the USA Today Web site at http://www.usatoday.com/news/opinion/editorials/2004-01-13-edit_x.htm.> To hear McDonough's opinions about the accounting profession in person, go to the Society's Web site at www.ohioscpa.com and register for the 2004 Members Summit. You can also register by calling CPAnswers, the member service center, at 888.959.1212.