next decade, and how will that affect the role and power of the next FASB chair?

While technical accounting knowledge will always be a vital skill for the next

chair of the standards board, observers say the ability to navigate difficult

diplomatic waters might turn out to be equally critical as the reality of an

International Accounting Standards (IAS) system gathers global support.

Soft Skills Needed

?It will be more important, as part of the whole movement toward convergence,

for the new chairman to take a leadership role in convincing U.S. accounting

that it has to overcome its reticence to the convergence of GAAP and IAS, says

David Hawkins, an accounting professor at Harvard Business School. The new

chairman is going to have a big selling job to do here in the U.S. The skills

needed are skills of diplomacy to deal with folks [overseas] and in the States.

In late October Jenkins said that he would retire from FASB at the conclusion of

his five-year term as chairman, which comes on June 30, 2002. His departure ends

more than 17 years with the standards board a period punctuated by the

introduction of controversial accounting standards addressing such areas as

business combinations and marking derivatives to market. A 38-year veteran of

accounting firm Arthur Andersen, Jenkins, 66, first joined FASB in 1984 as a

charter member of FASB's Emerging Issues Task Force and became chairman in 1997.

An FASB spokeswoman says the Financial Accounting Foundation, which funds and

manages FASB, hopes to find a replacement in early 2002. People familiar with

the board say candidates could include current board members most notably former

KPMG partner Edward Trott and former Andersen partner G. Michael Crooch as well

as people with deep accounting experience from the private sector.

Throughout most of Jenkins' tenure as chairman, the notion of a single body to

set accounting standards for the international community was largely conceptual.

Many U.S. accountants dismissed it because of the heightened financial

transparency demanded of companies here and the widely divergent relationship

between government and private sector enterprises globally. That made Jenkins'

job easier. To be sure, accounting experts generally agree that Jenkins has long

embraced global standards efforts, but ultimately he faced only the very

beginnings of the challenge of actual implementation. The next chair will face a

set of very different circumstances. First off, multinational companies are more

anxious for global standards to permit equal access to capital markets,

especially in the U.S. The Securities and Exchange Commission has also become

insistent about the need for international standards to move forward in the very

near future. And finally, the International Accounting Standards Board has been

up and running for more than nine months and is gaining momentum as the

accounting standard bearer for overseas markets.

Living with IASB

The growing acceptance of the IASB, in a sense, throws into question not only

the future role, but the potential for impact of the FASB. With the IASB

in existence as a functional body now, the next chairman will have to deal with

how to coexist with the IASB, says Walter Teets, an accounting professor at

Gonzaga University in Spokane, Wash., and a former academic accounting fellow in

the SEC's office of the chief accountant.

FASB's next chair may get a small break, though. Norman Strauss, an accounting

professor at Baruch College and former national director of accounting at Ernst

& Young, notes that any change to corporate reporting rules will require

approval by the SEC, which has its own political agenda of keeping accounting

standards as transparent as possible. It's a nice goal, but with the SEC

being a key player in all of this, a single accounting standard is still not

imminent, Strauss says.