When FASB took on the topic during the 1990s, corporate America flooded FASB's mail room with complaints and dissent and utter disgust. These executives took their arguments to Congress, along with lots of campaign contributions, and outflanked FASB. I still think FASB could have done more to win the populist vote, where the battle is winnable, but I admit that the odds were against the board once Arthur Levitt, then chairman of the Securities and Exchange Commission, caved in.

From this saga, FASB members should have learned how to argue with Congress. Specifically, the first thing to learn is when to fight, and my maxim is simple -- you fight when you can win. After Enron declared corporate bankruptcy, the board should have dusted off its notes. When WorldCom followed suit, the board should have issued a proposal within the month and declared, "We told you so!" Instead it waited until the flames of public passion turned to embers. After the past year's felicitous stock market returns, many investors don't care about the topic. To delay the issuance of an accounting standard any further is to allow this nonchalance to ossify, thereby removing a substantial amount of support for FASB's efforts.

Taking action immediately after the WorldCom bankruptcy would have been ideal. Taking action now is OK, though the battle is lost in the House (i.e., the Baker-Dreier bill passed the House 312-111). The Senate remains unlikely to pass the legislation (specifically, the Enzi bill), giving FASB a victory of sorts. A motivating factor for the inability to pass an anti-FASB bill in the Senate is that this is an election year, and at least some politicians want to avoid getting tagged as supporters of accounting scandals. If FASB delays taking action, it loses the leverage it has from this being an election year. Neither the Enzi or the Baker-Dreier bill will become law this year, since both chambers of Congress must approve a bill before it becomes law; next year, however, is quite a different matter. Next year is not an election year.

The second thing you have to learn about politics is the importance of deciding to whom one must appeal to win the war. In the case of FASB and the expensing of stock options, it is clear that most financial executives are opposed to this standard regardless of its logic. Most members of Congress will align with corporate managers and directors because of the consequent effects on their coffers. So to win, FASB must find support elsewhere and must leverage this support to restrict the actions that Congress might take. Because of the stock market's losing around $8.5 trillion dollars because of the accounting scandals, the obvious audience comprises those who have lost money. Of course, one still debates and cajoles managers and Congress in the hopes of winning a couple of converts, but the real effort should be directed toward those most likely to support your position and give credence to the need for the standard.

The next thing to do is to consider how to wage the war. In today's America, the how is easy -- it must be a PR battle and it must associate those who oppose expensing of stock options with those who carried out the accounting scandals. You go on the television circuit and talk with CNBC's Kudlow and Cramer, FoxNews' Neil Cavuto and others and state your case, with supplications to small investors to support FASB's efforts to protect the investment community from the crimes of corporate America. You run ads against members of Congress who support the bill to eviscerate good accounting and exhort the voters that these guys want more accounting scandals. Take the battle to the American public; that's where the battle can be won. As long as FASB makes stump speeches only to business executives, it will never prevail.

One must also understand the real reason that individuals and organizations urge delays and promote the idea of more research before the issuance of a standard on stock options. The rationale to delay the proposal ostensibly has to do with improving the accounting and the measurement of the expense with a "good" model, but this rhetoric serves only as a ploy either to delay the issuance forever or to kill it outright. Proponents for postponement have no wish for a standard ever to be issued.

By stating publicly that the board will consider such a delay only feeds into their tactics. FASB will now appear unreasonable if it doesn't postpone the date for issuing a standard and if it doesn't study various new models for measuring the expense. But, if the board takes this approach, it might as well close its doors and shutter the building, for there is never a perfect solution to any problem it will face. Improvements in accounting theory and improved models always develop over time.

And if those who desire to kill this proposal bring up model estimation problems, maybe FASB should alter course, particularly if this argument gains tractions. I suggest the board accept the position of Senators John McCain and Carl Levin and require firms to expense whatever they deduct for tax purposes. It isn't good accounting theory, but at least we expense something.

In short, FASB needs to buck up and take this fight to the people. It should hire a political and PR consultant and start conducting the political tactics necessary for winning the battle. The board must realize the political realities that surround its standard-setting process and then have the will to power.

J. EDWARD KETZ is accounting professor at The Pennsylvania State University. Dr. Ketz's teaching and research interests focus on financial accounting, accounting information systems, and accounting ethics. He is the author of Hidden Financial Risk, which explores the causes of recent accounting scandals, and columnist of The Accounting Cycle for SmartPros.com.