Emergency Post: Chief Accountant Candidates Could be Down to Just Two

My practice has been to post about once per week, and I had completed my latest less than a day ago. I'm coming back at you so quickly, because Bloomberg News has just come out with this:

"Securities and Exchange Commission Chairman Mary Schapiro settled on two finalists to be chief accountant, acting director James Kroeker and Baltimore money manager Jack Ciesielski, people familiar with the matter said.

Kroeker, a former Deloitte & Touche LLP partner and acting chief since January, and Ciesielski, who has defended mark-to- market accounting, met with commissioners this month to discuss their interest in the job, said the people who declined to be identified before an announcement …" Continued in article.

With the passage of time, it seems increasingly less likely that the next Chief Accountant will come from the Big Four; it would break a string of the last six in a row (more or less, I think). Especially given the records of the most recent guys in charge, I think that most would agree that it's time for a change in emphasis.   

Appointing Jack Ciesielski, a wise and straight-shooting investor advocate, would send a strong signal from the SEC that the voices of special interests would be muted henceforth. But, if Kroeker is promoted to be the permanent big cheese as an appeasement to the Big Four, it will look to much like Chair Schapiro lacked the gumption to face down a special-interest juggernaut. After all, Kroeker's only bona fides as an investor advocate are his leadership of a recent fair value study that chafed the chops of the banking industry big time. Other than that, the public pretty much knows only of his Big Four acculturation (and the inevitable accompanying baggage), and that he was appointed to deputy chief by the best imitation of a paperweight ever to hold the title of chief accountant.

Bonus Coverage

This morning, I merely smiled to myself at the audacity of two missives (missiles?) from PwC that came across from two very different sources. Now, after the sobering news from Bloomberg, not so much. These guys are nothing, if not tenacious.

First, there was a letter to academics directing them in no uncertain terms to include appropriate IFRS-related materials in the courses—else, their students would be deemed insufficiently programmed to serve as audit highly paid drones according to PwC's new hiring hiring criteria:

"PwC believes it is important for our new hires to have sufficient knowledge and skills about IFRS to transition easily into our practice. Therefore, we will include IFRS in the basis for making decisions about an applicant's level of technical and professional skills and knowledge. Starting in Fall 2009, we will expect that applicants will have used our learning opportunities or other means…"  [italics supplied]

Bob Jensen, a retired academic and former American Accounting Association Educator of the Year called the letter in remarks on the AECM listserv an "insult to the academy of accounting educators." ... " and "I've always admired PwC.  But I can only hope that they lose some terrific accounting graduates because of this Orwellian Big Bully strategy." 

Ditto from me, and sad to say some faculty seem all too willingly to line up and salute the flag.  About a year ago, I asked a first-year assistant professor at a smaller university, that was extremely proud of its record of placing students with the Big Four, why they were looking to add an entire course on IFRS to their curriculum.  Her answer was simple, yet devoid of any trace of irony or regret: "It's our job to give the Big Four what it wants."

Second, revisionist history continues in PwC's latest IFRS First newsletter: 

"Due to a new administration, ongoing economic issues, and responses to the proposed roadmap, there is some uncertainty around the final timetable for adoption of IFRS in the US. However, the responses to the Proposed Roadmap indicate that there still is strong support for a single set of global accounting standards. [LOL] We remain confident that:

The SEC is interested in moving forward with IFRS
The SEC will continue to approach the change with a thoughtful, measured process
The SEC will ultimately propose a revised roadmap
Adoption of IFRS in the US is inevitable " [italics supplied]

Has anybody else noticed that the mantra of "single set of high-quality global accounting standards" has been truncated to exclude that pesky 'high-quality' part?  The marching orders to all who have been captured by the Big Four's largesse is becoming more and more pointed:  'Forget quality. Forget convergence. Get with the IFRS program … or no more soup for you!'

If Mary Schapiro doesn't take a strong stand for investors on the chief accountant appointment, then  "inevitable" will become sooner than you can say PricewaterhouseCoopers.'

Comments

[Independent Accountant]

TS:
I go for Cieselski. I have followed him for years and think he is a straight-shooting, no nonsense kind of guy. Having attended a meeting here in Houston, in which Kroker was a panelist, I conclude he would be a horrendous choice for SEC chief accountant. Why? Having seen him respond to questions from the assembly, I concluded Kroker is hopelessly incompetent. But he's a former D&T partner. So?
What you wrote about PWC doesn't surprise me. Nor the fact that some academics think their job is to place accounting majors at the Big 87654. To that end, these "hackademics" tailor their curriculums to make the Big 87654, appear better than they are. Can you imagine any of them including Abe Briloff's stuff in a class reading list? Never.