SEC Seeks to Fill One of the Toughest Accounting Jobs
The Securities and Exchange Commission introduced final week that leader accountant Wes Bricker turned into stepping down after navigating a 3-yr length of transformation in the accounting and auditing profession.
Bricker supervised the implementation of ancient accounting requirements and arrangements for a third. And he oversaw the Public Company Accounting Oversight Board because it transitioned to new management in spite of everything 5 members of the audit regulator were replaced in 2017.
The submit serves an essential function in a career that shares strength across the enterprise, independent general-setters, and the government, said Heidi Bartholomew, a controller and monetary reporting veteran of FedEx Ground, a division of FedEx Corp., who now teaches on the University of Pittsburgh.
“The character who sits in that chair at the SEC through definition simply has to be one of the essential accountants, no longer simply within the united states,” she said. “The relaxation of the sector seems to us.”
In the pressure-cooker surroundings of Washington, it’s not unusual for authorities leaders to step down after or 3 years. For Bricker to serve six years, including his tenure as deputy leader accountant and an accounting fellow, is a feat, Bartholomew said.
“He’s written his price tag to the grand accounting corridor of fame now. He can do something he wants,” Bartholomew said.
Someone with Bricker’s experience should land at a Big Four accounting company, an employer, or academia, she stated.
Bricker told Bloomberg Tax he couldn’t say yet wherein he became headed subsequent and didn’t remark further.
The SEC named Sagar Teotia as an acting leader—an appointment generally made to make certain that someone leads the office while the commission searches for a successor. It hasn’t disclosed a timetable or the parameters of its seeking.
Challenges Ahead: CECL, CAMs
The subsequent chief accountant may be tasked with enforcing the revenue recognition and leasing requirements, and supporting to make clear the SEC’s enforcement focus, stated Scott Taub, who two times served as acting chief accountant.
“The assignment of managing alternate in accounting standards will possibly decrease for the subsequent chief accountant than it turned into for Wes because there can be less trade to control,” Taub stated.
Still, the subsequent leader accountant will oversee the rollout of a debatable accounting exchange in how banks and insurers calculate estimated losses on loans and different economic contraptions, stated Jack Ciesielski, an impartial accounting analyst.
The banking enterprise and individuals of Congress have again and again sought to delay the the 2020 powerful date.
An essential exchange in audit requirements additionally awaits Bricker’s successor. Annual economic statements will consist of an extended audit document detailing essential subjects that were complex and subjective beginning this summer time.
But making sure that the brand new communications, referred to as essential audit topics, or CAMS, might be meaningful and no longer turn out to be boilerplate would require ordinary reminders and coax from the SEC, Ciesielski said.
Whether the PCAOB makes suitable on pledges to change how the regulator operates stays an open query for the subsequent leader accountant, Ciesielski said.
Managing alternate on the PCAOB will require it to coordinate with the SEC to turn those promises into concrete reforms, said Taub, who has back to the personal zone and is now managing director of Financial Reporting Advisors LLC.
Under new leadership, the board had pledged to revise its inspection technique, to reply greater fast, and to be more transparent. A yr-and-a-1/2 later, the board has crammed key leadership positions, has made a few tweaks to its inspection technique, and is centered on implementing the modifications within the auditor’s document.
Tom Selling, a creator, consultant and semi-retired professor, hopes the SEC chooses a person with a vision to make typically widely wide-spread accounting ideas more applicable to buyers and doubtlessly lessen their reliance on non-GAAP metrics.
“It’s the Wild West out there,” he said of the proliferation of adjusted ratios and metrics that pressure investment choices. He recommended the SEC’s technique to allow the usage of non-GAAP metrics, with sure boundaries, isn’t working.
“Can we make GAAP higher or must we comprise non-GAAP?” Selling said.
“Maybe we need to think greater out-of-the-box about what GAAP measures would trump this,” he said.
New Standards, Audit Governance
Bricker played a vital role in assisting the Financial Accounting Standards Board to implement and resolve implementation troubles with primary new accounting requirements, said Thomas Linsmeier, a former FASB member and now a professor at the University of Wisconsin-Madison.
Those rules overhauled revenue recognition and rent reporting, which have shifted income and exposed trillions of greenbacks in lengthy-term obligations. Preparing for the two back-to-returned modifications took agencies and their auditors years of labor.
But Bricker deserves credit for making sure the regulations have been implemented and introduced to buyers on time, Ciesielski said.