A new year with hope. (A Message from the Chair).

In reflecting on the events of the past year--as we start a new year--I am very optimistic about our profession, the health of the financial markets and the restoration of investor confidence in the upcoming year. Some might ask, how can I feel this way in light of past events?

One of the early indications to me is the selection of William Donaldson to replace SEC Chairman Harvey Pitt by President Bush. In taking this important step forward, a stalled process has been put back into motion. Once Donaldson is confirmed by Congress, the ball will be rolling again towards restoring investor confidence and the public's trust in the financial markets. Since the resignation of ex-chairman Pitt and Public Company Accounting Oversight Board (PCAOB) Chair William Webster, the reform process had been slowed, leaving many concerned and skeptical. But now, the outlook seems much better. Donaldson, an experienced public servant, is well suited for the position.

Donaldson has years of experience in the financial world and is respected as a consensus-builder. Those consensus-building skills will be important as fundamental changes are introduced, debated and implemented. Much has already been written about his background and the qualifications he possesses for this important assignment. Suffice to say, his experience in investment banking, as a founder and Dean of Yale University's Graduate School of Business and his term as chairman and CEO of the New York Stock Exchange prepares him for this assignment. The experience he brings to the regulation of the financial markets will surely be a boon to investors. More importantly, the work of restoring investor confidence and public trust in the financial markets will continue forward. At the top of Donaldson's "to do" list is, of course, the appointment of a new chair to steer the PCAOB. With the PCAOB set to begin firm inspections this summer, an individual will need to be placed quickly. The process of getting this contr oversial new board started got off on the wrong foot when politics appeared to overshadow the selection of Board members and the chair. Hopefully, the selection of a chair for the PCAOB will not be as complicated or politically heated as it was in the last iteration.

With the troubling events of that PCAOB appointment process behind us now, we all hope that CPAs and investors can look forward to the implementation of reasonable reforms that could be a major step towards restoring confidence in our financial markets and regaining the public trust. As a profession, we're doing our part--it's time for regulators to allow the process to move forward and end much of the uncertainty that has troubled both the profession and the business community.

Because the PCAOB member appointments are critical to moving forward on the actual implementation and rule-making related to sarbanes-Oxley we think it is important to bring you the whole story. From beginning to end, the appointment process is laid out for you in an article in this issue of Catalyst, "The Nitty Gritty Details Behind the PCAOB." To see how it all began, and to understand all the politics behind the process, check out the article, found on page 20.

I've heard from several members who believe the Society has devoted too much attention to the Sarbanes-Oxley legislation, saying "it doesn't affect me." This issue is important for several reasons, including the likelihood that the Sarbanes-Oxley provisions will extend far beyond public companies and firms which audit them. We're already starting to experience a unique version of "bracket creep" in which companies and organizations that are exempt from these provisions are VOLUNTARILY electing to impose the restrictions. It's easy to say "it doesn't affect me," but the reality is you just might be surprised when it does.

As always, I would like to hear what you think. What is your take on the appointment of William Donaldson as chair of the SEC? What would you like to see come out of this whole process? What do you think? Feel free to respond--I'd like to hear what you have to say.

Editor's Note: To reply directly to Sandy Pierce. send an e-mail to [e-mail]. To share your response with the membership, send your "letter to the editor" to [e-mail].