2006's Influencers: 60 Authoritative Voices

Meet the leaders who will shape finance and accounting in a new year of economic and regulatory uncertainty.

Influence is a precious commodity, and the Sarbanes-Oxley Section 404 guidance issued by the SEC and the Public Company Accounting Oversight Board (PCAOB) last May underlines its value. The documents sent a clear message to finance functions, audit committees and external auditors: Don't let a narrow focus on the details of Sarbanes-Oxley Section 404 compliance -- and all of the costs, time and legwork it requires -- distract you from fulfilling the law's purpose. The general thrust of the guidance was, in large part, the result of pressure exerted by the finance executives on the PCAOB's standing advisory group (SAG) and the committee on corporate reporting (CCR), a group within Financial Executives International (FEI).

Before the guidance was issued, finance executives serving on the CCR -- including leaders from Comcast, Eli Lilly and Coke -- collectively approached Donald Nicolaisen, the SEC's chief accountant at the time, to point out that Section 404 compliance "is really expensive and costly, and we're not seeing the benefits in our organizations, which means that the shareholders are not benefiting," recalls Frank Brod, The Dow Chemical Co.'s corporate vice president and controller. Brod is a past chairman and current member of the CCR. "We suggested that we could still accomplish what the legislative purpose [of Sarbanes-Oxley] was, while doing so in a different way. When [the SEC and PCAOB] issued their guidance on May 15, they did take into account some of these provisions," he says. For example, external auditors were encouraged to use the knowledge they gained in previous audits of clients to help set the scope of subsequent Section 404 audits of those same clients.

"We thought they were very reasonable in their approach to make things a little more helpful," adds Brod, whose extracurricular activities include membership on the SAG, the FASB's emerging issues task force (EITF), and the standards advisory council of the International Accounting Standards Board (IASB).

That reasonableness on the part of the regulatory organizations sounds an encouraging note at the beginning of a year that promises to be anything but sensible given new economic uncertainties arising from an unappealing brew of escalating interest rates, gathering signs of inflation, and record federal-budget and trade deficits. Uncertainty reigns in the regulatory arena, too, where 2006 is shaping up to be a year of transition as new leaders take the helm at the U.S. Federal Reserve, the SEC and the PCAOB.

Many key leaders departed throughout 2005. The SEC, for example, bade farewell to Nicolaisen, chairman William Donaldson, division of enforcement director Stephen Cutler and deputy chief accountant Andrew Bailey.

That turnover -- largely the result of grueling workloads rather than political machinations -- makes the coming year an especially crucial one for corporate finance executives seeking to make their voices heard in the corridors of the regulatory bodies.

And if that's not enough of an incentive to join the ranks of the movers and shakers, keep in mind that the benefits of influence can also be personal. "I would have told you that I joined something like the standing advisory group because I believe in having a say and I wanted to influence," says Nick Cyprus, senior vice president, controller and chief accounting officer of The Interpublic Group of Companies, an organization of advertising and marketing services firms. "That's definitely the case, but I've met very smart people with very diverse opinions, and I've walked away from each SAG and CCR meeting knowing a lot more. These represent the best continuing education sessions you could ever have."