As an accounting professor who has studied the debate regarding accounting for employee stock options, I was surprised that George F. Will ["Bull Market in Innuendo," op-ed, June 12] said that companies were being forced to record employee stock options "on balance sheets as expenses." No one is arguing that employee stock options should be recorded on balance sheets as expenses because expenses are never reported on balance sheets but rather on the income statements.

Further, Mr. Will said, "To record these options as expenses involves putting a highly speculative future value on those options." No one is arguing that the amount to be expensed is an estimate of the stock option's future value. Instead the amount to be expensed is based on an estimate of the stock option's current value at the grant date.

I also found Mr. Will's claim that "envious big businesses" are behind the push to expense stock options to be a novel conspiracy notion. Most of the push behind the mandatory expensing of stock options is coming from users of financial statements, including individual and institutional investors. The Financial Accounting Standards Board also wants to improve comparability, simplify accounting procedures and converge with international accounting standards.

Mr. Will did not point out that Rep. Christopher Cox (R-Calif.), the president's nominee to be chairman of the Securities and Exchange Commission, co-sponsored a bill that would require the mandatory expensing of only stock options granted to a company's five highest-paid executives. This is certainly a way to keep compensation from "devouring earnings," but it makes no sense. Why not only recognize as an expense the compensation paid to the five lowest-paid employees? That would certainly increase earnings.

Mr. Will's attempt to illuminate and defend Mr. Cox's position on employee stock options demonstrates the danger in having accounting standards determined in a political arena rather than by an independent board of experts overseen by the SEC.

KATHY PETRONI

East Lansing, Mich.