Ex-FASB Chair Robert Herz Examines Financial Reporting Challenges in New Book

Memoir Draws Lessons from Herz’s Decades of Experience in Accounting and Standard Setting

April 18, 2013

NEW YORK (April 18, 2013) - As chair of the Financial Accounting Standards Board, Robert Herz pushed for improved accounting standards and greater transparency in financial reporting during a period that stretched from the aftermath of Enron to the depths of the worst financial crisis since the Great Depression. Accounting and financial reporting have improved significantly over the past decade, but critical challenges remain, Herz writes in a memoir of his career.

The Economist once said that Herz “has had a more interesting career than any accountant deserves,” and he furnishes plenty of evidence in Accounting Changes: Chronicles of Convergence, Crisis and Complexity in Financial Reporting. The book, published by the American Institute of CPAs, delves into hot-button issues of the day and examines how FASB, the Securities & Exchange Commission and other regulators dealt with them, from the expensing of employee stock options to the treatment of off-balance sheet entities, and from the definition of fair value to the movement toward commonly embraced international accounting standards. These and other key issues and developments are explored in depth in a book that provides a strong case for the vital importance of sound accounting and financial reporting to the capital markets, the financial system and the economy.  

A former senior partner at Coopers & Lybrand and PricewaterhouseCoopers, leader in the profession, and original member of the International Accounting Standards Board, Herz has the candor to recount some missteps while guiding FASB, along with the numerous achievements he and his colleagues helped oversee. And he lays out suggestions for changes that he believes will positively impact financial reporting, including:

·         Financial documents that are less complex and contain key nonfinancial information that impact business performance. 

·         Better use of technology to improve the accessibility and utility of financial information.    

·         “Wrestling to ground” a number of fundamental conceptual issues that continue to challenge accounting standard setting and financial reporting.

·         Greater clarity from the SEC on where the United States is heading regarding international accounting standards.  “The U.S. system should not have to ‘ride two horses’ for an indefinite or a prolonged period, and the world is watching and waiting,” he writes.

Herz says he is eager to see what the future will bring. “Imagine a global reporting system in which, for any listed company in the world, you can quickly access consistently prepared, comparable, and understandable financial and key nonfinancial performance information,” he writes.

To schedule an interview with the author or request a review copy, please contact Jeff May at the phone number or email listed above.