Q. Do you regard the recent changes to the law - especially the Sarbanes-Oxley Act - as toothless or an important enhancement to the arsenal of law enforcement agencies? Do you think that the SEC should have any input in professional self-regulating and regulatory bodies, such as the recently established accountants board? A. It remains to be seen. The Act establishes a Public Accounting Oversight Board ("the Board"). It reflects one major aspect of SEC enforcement practice: unlike in many countries, the SEC does not recognize an accountant/client privilege, though it does recognize an attorney/client privilege. Regrettably, in my experience, attorneys organize at least as much securities fraud as accountants. Yet in the US, one would never see an "attorneys oversight board". For one thing, Congress has more attorneys than accountants. Section 3 of the Act, titled "Commission Rules and Enforcement", treats a violation of the Rules of the Public Company Accounting Oversight Board as a violation of the '34 Act, giving rise to the same penalties. It is unclear if this means waiver after waiver, as in present SEC enforcement. Even if it does, the Rules may still be more effective because US state regulators can forfeit an accountant's license based on a waived injunction. The Act's provision, in Section 101, for the membership of said Board has yet to be fleshed out. Appointed to five- year terms, two of the members must be - or have been - certified public accountants, and the remaining three must not be and cannot have been CPAs. Lawyers are the likeliest to be appointed to these other seats. The Chairmanship may be held by one of the CPA members, provided that he or she has not been engaged as a practicing CPA for five years, meaning, ab initio, that he or she will be behind the practice curb at a time when change is rapid. No Board member may, during their service on the Board, "share in any of the profits of, or receive payments from, a public accounting firm," other than "fixed continuing payments," such as retirement payments. This mirrors SEC practice with the securities industry, but does little to tackle "the revolving door". The Board members are appointed by the SEC, "after consultation with" the Federal Reserve Board Chairman and the Treasury Secretary. Given the term lengths, it is safe to predict that every new presidential administration will bring with it a new Board. The major powers granted to the Board will effectively change the accounting profession in the USA, at least with regards to public companies, from a self-regulatory body licensed by the states, into a national regulator.