2005's Influencers: 50 Worth Watching

Here's this year's roundup of the regulators, watchdogs, corporate leaders and academics who are quietly -- and not so quietly -- determining the future of accounting and finance.

While many voters cringed at the sharply adversarial tone of the past two presidential elections, pundits pointed out that the closely contested battles at least demonstrated that our electoral process works. A similarly contentious dynamic is currently at play in the world of finance and accounting, although the power wielded by leaders in this realm rarely matches that of the highest-ranking elected officials. "We don't have a vote at the [legislative] table, so we can only attempt to influence the decisions and process so far," says Arnold Hanish, chief accounting officer of pharmaceutical giant Eli Lilly and Co. in Indianapolis. Hanish and a select group of corporate finance executives from six other organizations are exercising their right to influence as members of the standing advisory group which serves as a sounding board and guide for the organization that's at the epicenter of ongoing change in auditing, accounting and finance: the Public Company Accounting Oversight Board (PCAOB).

The 30-strong membership of the standing advisory group (SAG) also includes pension fund directors, lawyers, academics, governance experts and public accounting professionals. The group meets regularly with the PCAOB to help it set priorities as it develops new auditing standards.

The SAG's first three meetings have demonstrated that a collision of opposing perspectives can be a positive force for change. "I think we all agree that we're there to protect the investing community," Hanish notes. "I think we all realize the impact that the last five years of audit failures and poor management judgment have exerted on the capital markets. And we need to bring investor confidence back to where it was."

Yet the meetings also demonstrate that perceptions of the exact magnitude of the required changes and ideas about how they are to be executed vary greatly among investors, auditors, academics, and those corporate officers who are most directly affected by changes in the rules governing preparation and attestation of financial statements.

Some SAG members, particularly those from the investor community, have maintained that the Sarbanes-Oxley Act doesn't go far enough, despite the cost and burden that compliance imposes on public companies. They're hoping to see new, more stringent standards and rules from the PCAOB and the SEC.

SAG member Jim Campbell, Intel Corp.'s vice president of finance and enterprise services and corporate controller, offers a different perspective. He compares Sarbanes-Oxley to a powerful new water heater that, after many months of tinkering, has achieved the desired temperature. Now the water "should be allowed to run through the tap before we determine that we don't have any hot water," he says. "It seems premature to be actively considering a host of additional requirements when I would submit that 302 and 404 have been very effective."

Finance and accounting executives who have endured the heat of Sarbanes-Oxley compliance can relate to that sentiment, and they owe Campbell, Hanish and the other corporate finance executives on the SAG their gratitude for communicating to the PCAOB the potential impact of new auditing standards on public companies.

In the next 12 months, ongoing regu-latory activity will no doubt continue to provoke contentious discussions in the finance, accounting and auditing professions. Whether the finance and accounting rules-making process works will largely depend on how the following individuals wield their influence in the coming months.