Robert Herz is stepping down as chair of the Financial Accounting Standards Board, leaving behind an impressive body of work, some awfully big shoes to fill … and lingering questions about a whole range of accounting issues.
Among them is the plan to bring the United States in line with global accounting standards, a subject on which Herz and the FASB have been front-and-center for years.
But as the Wall Street Journal's David Reilly and Michael Rapoport report, “Mr. Herz's departure may affect the (FASB's) ability to complete projects designed to bring together its rules and those set by the London-based International Accounting Standards Board. Mr. Herz's long-stated goal was to make both accounting regimes similar enough that U.S. public companies could abide by the international standards.”
And what about private companies? Should they be held to a different set of reporting standards, and if so, what should those standards look like? Herz's retirement comes in the midst of a blue-ribbon panel's work on that very issue. How, if at all, will Herz's retirement impact that movement?
It's an issue that weighs heavily on the minds of many within the CPA profession. In his comments on Herz, Melancon mentioned private company reporting specifically, saying, “Now more than ever, it is imperative that the Financial Accounting Foundation, working with the blue ribbon panel, find an innovative solution to the problem of addressing the need for private company standard setting in the United States.”
Interesting questions. For its part, the FASB says it remains committed to the processes that are already in place on issues like IFRS and fair-value accounting.
I tried contacting the FASB to see if they'd let me interview Herz as he prepares to step down. They politely denied my request, citing “the many personal and professional things going on” in Herz's life at the moment.
I guess I can't blame him. If I had just served through one of the most turbulent eras in the FASB's history, I'd be ready for a breather, too.
The good news: Herz's interim successor is Leslie Seidman. She has been a FASB member for more than seven years, so she knows these issues first hand.
Best of all, she — like Herz — is a CPA.
From that standpoint, anyway, it appears the FASB is in good hands.