By Richard Martin, head of financial reporting, ACCA
Bob Herz, chair of the US' Financial Accounting Standards Board (FASB), has announced – as I'm sure you've noticed – that he's to retire from the role early. With the IASB's chair, Sir David Tweedie, stepping down next year, it's suddenly 'all change' at the top of the key accounting standards bodies.
Rachel Sanderson in today's FT (£) sees the departures as an opportunity for the accounting profession. I'm not so sure we can call the long-term impact of the departures just yet; Herz's departure in particular raises more questions than answers:
- Why has Herz left now? It's not the best timing, given the IASB and FASB are both engaged in a major push to try and get a whole series of converged standards agreed to according to a programme endorsed by both the SEC and G20.
- Is it connected to the FASB Financial Instruments Exposure Draft, which has been less than warmly received in the US and is also divergent from the IASB position? Bob Herz voted in favour of it, but his temporary replacement, Leslie Seidman, voted against.
- The SEC is meant to be getting closer to a decision on whether to adopt IFRS. Do the changes – particularly the decision to increase the size of the FASB board from 5 to 7 – indicate that the SEC is going to give a 'no' to IFRS, meaning FASB will be needed for longer? After all, the 5 member board (reduced from 7) seemed to be too small and perhaps too dependent on the individuals involved, and was split on some key issues.
- What does this mean for the current convergence programme? I suspect this will be delayed further.
- Who replaces Herz and Tweedie? There's an issue in recruiting high quality individuals to boards, and to these roles in particular. There have been suggestions that the search for Tweedie's replacement has been bedevilled by problems; for the FASB role these problems will be even greater given the degree of uncertainty over the longer term future of the organisation.
- And where next for Herz? He was after all once spoken of as a possible successor to David Tweedie…
Update: There's an interview with Leslie Seidman over on WebCPA