A few weeks ago in Washington, D.C., an elite group of finance executives, fund managers, academics and investor advocates gathered for an unusual set of meetings. The mission of the group, which numbers more than 30 members, is to provide fresh insights and guidance for future auditing changes. David Shedlarz, Pfizer Inc.'s CFO, was there, as were James Campbell, corporate controller at Intel Corp., John Morrissey, General Electric Co.'s operating controller, and representatives from each of the Big Four accounting firms.

The event's sponsor was the Public Company Accounting Oversight Board (PCAOB), the private-sector accounting regulator established under 2002′s Sarbanes-Oxley Act, and the gathering marked the first meeting of the PCAOB's Standing Advisory Group. "When the [PCAOB] decided that it would not designate an outside group to set the standards, but would set the standards itself, that really created a new era in standard setting," remarked Doug Carmichael, the PCAOB's chief auditor and chairman of the advisory group, at the start of the session. "Particularly important is that the people that will be participating in the standard setting process will include not only experienced auditors, but also preparers of financial statements and investors and other very knowledgeable people familiar with the auditing process, who will be really directly participating for the first time in the standard setting process."

Eighteen months after it famously opened its doors in the K Street offices that once housed Arthur Andersen LLP, the PCAOB is starting to fulfill its promise of shaking up the clubby world of public company audits. Setting standards for accountants is just part of its mission, since the PCAOB is also the new cop on the beat. With its start-up era of good feeling behind it, the agency has much to demonstrate, including whether it can improve upon the decades of accounting industry self-policing that failed to prevent the many deep financial scandals of the last few years.