POB: We Disbanded After Pitt Left Us Out

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POB: We Disbanded After Pitt Left Us Out

WASHINGTON -- Members of the Public Oversight Board (POB) told Congress Tuesday they voted to disband after the Security and Exchange Commission chairman made a crucial decision without them, The Associated Press reported.

The POB members said the decision to cease to exist on March 31 was made after Harvey Pitt consulted privately with industry officials on a proposal for change but not with them. They also reiterated their appeal to create a new body to regulate the accounting industry that would be private but independent of the industry and not reliant on it for finances.

The need to change the system is especially clear after the Enron accounting debacle, oversight board chairman Charles Bowsher testified Tuesday at a hearing of the Senate Banking Committee.

"To protect investors and the public, the old system of voluntary self-regulation for the accounting industry must be replaced," Bowsher said. "It is time to resist the continuation of the status quo and move ahead with fundamental change."

The new body would be called the Independent Institute of Accountancy, would be created by Congress and would oversee accounting standards, inspections of auditing firms and discipline of accountants. Under Bowsher's plan, it's estimated $100 million annual budget would be paid through fees paid by companies whose stock is traded publicly.

-- NYSSCPA.org News Staff