Mark-to-Market Advocate as Chief Accountant?

SEC Chairman Mary Schapiro may choose Charles Niemeier, a supporter of “mark-to-market” rules that some banks blame for the financial crisis, as the agency’s chief accountant.

Niemeier, 52, was among the original members of the Public Company Accounting Oversight Board when it was formed in 2002. He has always been an advocate of mark-to-market, also known as fair-value.

Lawmakers including Senate Banking Committee Chairman Christopher Dodd have said regulators may need to consider temporary changes to fair-value as the government prepares to bail out banks. Blackstone Group LP Chairman Stephen Schwarzman said Oct. 30 that fair-value accounting was a “major contributor to the financial crisis.”
Proponents, such as the FASB and Treasury Secretary Timothy Geithner, say the rule adds to transparency and gives investors information about companies.

However, Niemeier has publicly criticized a the IFRS proposal pushed last year by Christopher Cox, then SEC chairman, to let large corporations switch from U.S. to international accounting rules by 2014. Moving to IFRS is unlikely to “result in benefits to investors in U.S. securities or the U.S. economy,” Niemeier said in a September speech in New York. Schapiro said in her Senate confirmation hearing Jan. 15 that she is concerned about Cox’s IFRS plan and doesn’t feel “bound” to it.

Of course, even Washington insiders are not immune from the effects of the current job market. Niemeier would be taking a pay cut if he joins the SEC. As a PCAOB member, he made $531,995 last year! The average salary in 2008 for SEC senior officers, including chief accountant, was only $203,895. Maybe he should consider a CEO position at a TARP-recipient bank—they can make up to $500,000!