by Glenn Cheney
Norwalk, Conn. - John K. Wulff, former chief financial officer at Union Carbide and one of the driving forces behind the streamlining of the standard-setting process, has resigned from the Financial Accounting Standards Board, effective June 30.
Wulff’s mid-term resignation comes at a time when FASB is staring at a lengthy to-do list, including stock-option expensing, becoming the profession’s lone standards setter for generally accepted accounting principles and examining a move toward principles-based accounting, to name a few.
At press time, a replacement had not been named. Wulff was elected to the board in 2001 because of his strong background in the corporate sector.
"For over a year now I’ve wanted to get back into the private sector, and I think that now is an appropriate time for me to do that," Wulff said. "It is earlier than expected, but when I came to the board, my strength was more in the area of process and administration and less in technical expertise."
FASB chairman Robert Herz indicated that, over the past year, he has been trying to convince Wulff to remain with the board.
"John’s done a lot of work on internal process management and project management, but I think he believes that now is a good time to return to the corporate community, given everything that’s been going on," Herz said. "I’m disappointed because he’s been a good board member, and turnover is not good."
Wulff has also been an advocate of a simplification of accounting standards and has been a key proponent of the possible shift to principles-based standards.
"I think the principles-based standards project, as well as the project on simplification and codification, have set the stage for doing some things to improve retrievability and potentially cause our standards to be a little simpler and more operational to apply," Wulff said.
He added, "I’m fairly happy with where the board is going, and I think I’ve made a contribution in those areas. It’s probably a good time for me to move on."
Wulff indicated that he misses the excitement of the private sector. He has no plans to work with FASB-related organizations, such as the Technical Issues Task Force and the Financial Accounting Standards Advisory Council, but he looks forward to writing comment letters on FASB proposals, which, he says, he’ll be better at than he was two years ago when he joined the board.
When it comes time to write comment letters, Wulff foresees himself generally backing the board’s efforts on simplification and codification but, perhaps, depending on how things develop, taking issue with board proposals on fair value and "component-izing" financial instruments.
The Financial Accounting Foundation, which oversees the financial and member elections of the board, tries to maintain a balance of members from the corporate community, the public audit community and the users of financial information.
When Wulff was elected to a five-year term on the board in 2001, FAF chairman and president Manuel H. Johnson said, "FASB is indeed fortunate to have John join its ranks. John’s impressive credentials and experience in both industry and public accounting will make a significant contribution to the FASB team."
Wulff declined to comment on exactly where he will again become part of industry. Prior to becoming CFO of Union Carbide, he served as that company’s controller. He also was an audit partner with KPMG and chaired Financial Executive International’s committee on corporate reporting.
Having no intention of limping through his last six months as a lame duck, Wulff promised to remain very active until his last days on the board.
Wulff’s advice to his eventual replacement: Read and pay attention to the concept statements that stand behind every FASB pronouncement as an explanatory rationale.
"One of my personal objectives in joining the board was to recharge my intellectual batteries," Wulff said. "The first thing for any new board member - especially someone coming from industry - is to read the conceptual framework. I think there are a lot of opportunities for the board to improve it, but I also recognize that there are a lot of very basic, very good principles."
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