Former U.S. Securities and Exchange Commission (SEC) chief accountant Lynn Turner remains actively involved in helping to shape the future regulatory landscape. He currently serves on the Standing Advisory Group of the Public Company Accounting Oversight Board (PCAOB), as a trustee of a large public pension fund, and as a senior adviser to Kroll, Inc., a forensic accounting firm. Turner also was appointed to the U.S. Treasury Department's Advisory Committee on the Auditing Profession — an influential committee that his PCAOB SAG colleague Joseph Carcello believes corporate finance executives ought to keep tabs on. Turner shared his views on the subprime crisis's impact on corporate finance departments and other regulatory matters.

BF: How long does it take to recover from a major financial crisis such as the subprime credit one?

Turner: Whenever you have to de-leverage a country's balance sheet, as we're doing, it takes time. I went through this with the S&L crisis, and it's not a one-year process.

BF: Briefly, how might the average U.S. company be expected to respond to this fallout in coming months?

Turner: Cash will once again become king. Companies will need to hunker down and maintain their cash and reduce their costs quickly. This will be an instance where you find out who is very agile and who isn't.

BF: Can you compare the current crisis to any past crises?

Turner: I think that there is an inclination to say that the last major scandal is the worst anyone has seen because it's fresh in mind. This is probably closest to the '72-'73 market downturn. The economy did not do well for an extended period of time. The market never really came back until about '81-'82. … Right now, this one feels a lot like that one.

BF: What do you make of the Treasury Department's blueprint for regulatory reform?

Turner: The deregulatory mind-set of this administration is coming home to roost, and it's going to cost us a lot more money than regulation ever would have. … At a time when it becomes painfully clear that it was the lack of regulation that helped to facilitate people doing what they did, it just doesn't go over with the American public that you deregulate more. In essence, this is what the blueprint does.