News that the SEC refused a 2007 pay increase for FASB members sheds more light on the subtle ways that the Sarbanes-Oxley Act has increased the SEC's power over FASB.
Proposed raises for the members of the Financial Accounting Standards Board were shot down by the Securities and Exchange Commission last fall, causing a stir at FASB.
CFO.com first learned of the FASB raise rejections last Friday while reporting on efforts by the SEC to formalize its role in the nomination and approval of FASB members and trustees of FASB's parent organization, the Financial Accounting Foundation. That move raised a debate among observers and FASB members about whether the regulator was using the provisions of the Sarbanes-Oxley Act to increase its influence over FASB. The SEC's power to approve FASB's budget was also created by the Sarbanes-Oxley Act.
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Robert J. DeSantis, president and chief operating officer of the FAF told CFO.com the pay increases submitted last year were "an attempt to reconcile" board pay with raises in the market.
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