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Amid the current market turmoil that has generated calls to modify accounting rules, such as those regarding fair value, to limit bank losses, the appointment of Marc Siegel to the Financial Accounting Standards Board is seen by some as a boon for the investor community.
“He's going to fill an investor's point of view,” said Charles Mulford, professor of accounting at the Georgia Institute of Technology's College of Management.
Mr. Mulford, who said he knows Mr. Siegel well, added: “Marc brings a portfolio of analytical skills including forensic accounting that I think will serve FASB well. It's a point of view that I think FASB needs.”
Mr. Siegel, who declined to comment for this article, will join the board Oct. 20. He will replace George Batavick, a former comptroller at Texaco, whose term ended June 30 but was briefly extended during the search for his successor.
Mr. Siegel currently serves as the head of accounting and legal research for RiskMetrics Group's financial research and analysis unit. He was the managing director of global research at the Center for Financial Research and Analysis until its acquisition last year by RiskMetrics.
Previously, he worked for 10 years at Arthur Andersen in audit and forensic accounting. He graduated from the Wharton School of the University of Pennsylvania in 1991 with a B.S. in economics.
Mr. Siegel has gotten a taste of FASB since he was invited last year to join its Investor Technical Accounting Committee, or ITAC. In that role, his job was to provide an investor perspective for FASB during its deliberations about new accounting pronouncements.
In Mr. Siegel's new role as board member, he will continue to do so, and it seems that's what FASB was seeking.
According to Denny Beresford, FASB chairman from 1987 to 1997, who doesn't personally know Mr. Siegel, “FASB was looking for someone with a user background,” a reference not only to investors but more broadly to professionals such as analysts who help interpret financial statements for investors.
Mr. Beresford, also a member of the Securities and Exchange Commission's advisory committee on improvements to financial reporting, added that “we specifically recommended that there'd be someone with user experience [on the board]. According to his credentials, it certainly seems to be the case.”
FASB declined to comment. But in a press release announcing the appointment, Robert Denham, chairman of the Financial Accounting Foundation, which oversees FASB, said Mr. Siegel's investor perspective, along with his auditing, research and international expertise, will aid in the fulfillment of FASB's mission, as well as its many investor-focused goals.
For instance, with regard to recent hot topics such as fair-value accounting and the consolidation of off-balance-sheet securitized assets, Mr. Siegel has been advocating transparency for investors, rather than actions to minimize the impact on companies, especially financial institutions, which have been pushing against such rules.
“He would hold the line on fair-value accounting,” Mr. Mulford said, adding that Mr. Siegel “would have been very much opposed to allowing securitization transactions to be accounted for off balance sheet unless they're true sales.”
Mr. Siegel will also be busy for years to come—his board term ends in 2013—with the convergence between U.S. and international accounting standards and ultimately the move to international financial reporting standards for U.S. companies.
During webcasts organized by RiskMetrics, Mr. Siegel has said that move could add transparency for investors but also acknowledged that the road to convergence between U.S. and international standards will be a long one.
“My feeling is that as long as we can get to a truly high-quality, single set of global standards, moving to that single set would be a benefit to investors,” he said during a webcast last month. “But I think we're nowhere near converged at this point.”
Mr. Siegel went on to say he was pleased that the SEC had laid out a road map, because without a date certain, “I'm pretty confident the progress would be excruciatingly slow. However, with all the wars we might have in U.S. GAAP today, I think we still have much for IFRS to catch up on.”
Jack Ciesielski, an accounting expert who knows Mr. Siegel from their work together on ITAC, wrote on his blog last week that Mr. Siegel “will be a fine addition to the slimmed-down board.”
“And he's going to be joining it at a pivotal time in the Board's history,” Mr. Ciesielski wrote, “as it faces the fallout from the Wall Street bailout bill—including a hostile pushback of fair-value accounting.”
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