SEC Chief Accountant Resigns Amidst Controversy

Securities and Exchange Commission (SEC) Chief Accountant Robert K. Herdman resigned last week effective immediately. He was criticized for his role in the controversial appointment of William Webster as the new Public Company Accounting Oversight Board (PCAOB) chairman.

Mr. Herdman, who was dubbed the "Anti-Regulation Regulator" by the New York Times, said he was stepping down "in light of recent events" and because the SEC was facing crucial decisions about accounting rules under the Sarbanes-Oxley corporate reform law. In his letter to SEC Chairman Harvey Pitt, he wrote, "The objectivity of those decisions will be enhanced if someone other than I functions as the Commission's principal adviser on accounting matters."

Earlier in his career, Mr. Herdman was vice chairman and senior technical partner at Ernst & Young. Chairman Pitt issued a statement, saying, "It is with profound regret that I accepted Robert Herdman's resignation this afternoon. His depth of experience made him the most qualified chief accountant in the agency's history. He has been a tremendous leader to his staff and a tremendous resource to the Commission."

But insiders say Chairman Pitt privately blames Mr. Herdman for the controversy surrounding Mr. Webster's appointment. Apparently, Mr. Herdman investigated Mr. Webster's handling of the U.S. Technologies audit committee incident and concluded it posed "no problem." He was criticized for not sending that assessment in a memo to the other four SEC Commissioners.

Sources say Mr. Herdman is not apologizing for any of his actions. In his letter to Chairman Pitt, he wrote, "It has been an honor to serve under your leadership. I regret that we did not accomplish all that we set out to do, but we did accomplish a great deal in a time that while short, was replete with unprecedented challenges."

You may like these other stories...

A proposal issued by the Governmental Accounting Standards Board (GASB) last week explains how fair value measurement should be defined for state and local government financial reporting.The exposure draft, Fair Value...
By Jason Bramwell The board of trustees of the Financial Accounting Foundation (FAF) finalized a new policy on November 19 that provides the Governmental Accounting Standards Board (GASB) with direction on what...
By Jason Bramwell The Governmental Accounting Standards Board (GASB) is now offering a free online toolkit designed to assist preparers and auditors of state and local government pension plans with implementing new...

Already a member? log in here.

Upcoming CPE Webinars

Oct 30Many Excel users have a love-hate relationship with workbook links.
Nov 5Join CPA thought leader and peer reviewer Rob Cameron and learn ways to improve the outcome of your peer reviews while maximizing the value of your engagement workflow.
Nov 12This webcast presents basic principles of revenue recognition, including new ASU 2014-09 for the contract method. Also, CPAs in industries who want a refresher on revenue accounting standards will benefit.
Nov 18In this session Excel expert David Ringstrom, CPA tackles what to do when bad things happen to good spreadsheets.