Mark Olson, a retired EY partner, recently completed a three-year stint as Chairman of the PCAOB. This was the most recent in a series of public service positions that Olson assumed after leaving EY in 1999. He served as a member of the Federal Reserve Board of Governors for five years. Previously, he was Staff Director of the Securities Subcommittee of the Senate Committee on Banking, Housing, and Urban Affairs. Currently Olson is Co-Chair of Corporate Risk Advisors LLC, a consulting firm specializing in the financial services industry.
Financial reporting is increasingly in the spotlight, and with it, the role of accounting. In fact, it’s difficult to name a line of work — other than sports — that has more visibility today. Given the importance of accounting to the healthy functioning of the markets and its higher profile overall, it’s vital for the larger public to gain a better understanding of financial reporting and the purpose of accounting.
Not long ago, financial reporting was of primary interest to a relatively small group of people — professionals in accounting and finance. But that has changed, in large part due to a growing portion of the US population participating in the stock market. The meltdowns of Enron and WorldCom certainly played a role. Consequently, the quality and reliability of financial reporting is a significant public policy issue.
There is attention focused, unsurprisingly, on the Big Four accounting firms, which are viewed as having too great an impact on the financial markets by dint of their sheer size, blue-chip clients and global footprint. In addition, there is a significant gap between the actual purpose of an external audit and the public’s understanding of an audit opinion. Of course, professionals routinely deploy highly precise language to explain the limits of their audit work and the qualifications to their audit opinions. But on the whole, the average American views an auditor’s signature as a clear endorsement of a company’s results.
What can be done to foster greater transparency and insight? Fortunately, national authorities worldwide are working together on the global stage to raise audit standards in a way that contributes to consistency and a level playing field. The more visible these efforts are, the greater the awareness that will result in the public sphere. In addition, industry leaders need to speak out regularly on issues such as audit quality and standards. These activities will serve to bring a new appreciation of the complexity that auditors face every day and of the meaning of their work.
In the next decade, certain trends will keep financial reporting high on the public agenda. Global commerce, unconfined by jurisdictional borders, will expand. And the rapid technological changes we’ve witnessed in the last three decades will accelerate the pace of change. These factors will lead to greater market volatility across the globe and, consequently, to continued scrutiny of the work of accountants.
I acknowledge that there are great challenges ahead of us. But I am also very optimistic about the new generation. Over the years, I have helped young people grow professionally and find the right career opportunities. Currently, through my work at the Mason School of Business at the College of William & Mary, I have met many bright, energetic young people who are eager to enter the profession and who will advance public recognition of the value of the accounting field.
More about Mark Olson
- First National Director of EY’s Regulatory Consulting practice
- President of the American Bankers Association in 1986
- President and CEO of Security State Bank in Minnesota for 12 years
- Served in a Treasury Department initiative to assist Eastern European bankers in adapting to a free market
- Serves on the Oversight Board of the Master of Accounting program, Mason School of Business, College of William & Mary
Closing the loop
For all his career accomplishments, Mark Olson told us, finding his professional niche took several years. By the time he joined Arthur Young to serve in regulatory consulting, he was at the peak of his career, the culmination of more than a decade of experience in the banking industry and on Capitol Hill.
EY literally followed Olson from one stage of his career to the next. After retiring in 1999, he was looking forward to spending more time on the golf course and on his boat. But it was not to be. Partner Mary Frances Pearson alerted Olson that the Senate Banking Committee was looking for a staff director for its Securities Subcommittee. She encouraged him to accept the job, which he did. This highly visible role led to Olson’s positions on the Federal Reserve Board and the PCAOB, where he met up again with Chris Mandaleris and Phil Peters. “I discovered that there is a genuine bond among EY alumni,” Olson says.
Similarly, Mark established a bond with Conrad Hewitt, also a former EY Partner, who was named Chief Accountant at the Securities and Exchange Commission at about the same time that Mark was named as the Chairman of the PCAOB. Throughout their tenures with the SEC and PCAOB respectively, they worked together closely on a number of policy issues.
In addition to his accomplishments in industry and public policy, Olson has become more skilled at helping young people grow professionally and pursue worthwhile opportunities that fit them best. “In my case, it took a few years to find the right niche — a role that allowed me to maximize my contribution.” He encourages young people to “pursue interests and stick with those you really enjoy. Then, like me, you’ll be 66 and you just won’t feel like retiring.”