The Securities and Exchange Commission (SEC) on January 14, 2025, said that Chief Accountant Paul Munter will retire on January 24.
During his tenure, he has publicly suggested the FASB to take on certain accounting standard-setting topics, a break from norm. In particular, he emphasized the usefulness of financial statements for the benefit of investors.
Munter was also the architect of the controversial Staff Accounting Bulletin (SAB) No. 121 on crypto custody accounting, prompting SEC Chair Gary Gensler to publicly defend during conferences and congressional hearings.
SAB 121, which was issued at the end of March 2022 to better protect investors, describes how companies should account for custodial services of crypto assets. Because of risks unique to crypto, the staff determined that companies should record a liability and corresponding asset on their balance sheets at fair value.
But there was a ferocious pushback from the crypto industry and banks, heavily lobbying against it. Banking regulators have been quietly critical of the SEC staff’s accounting guidance. Congress passed legislation to kill SAB 121, but Biden vetoed it.
Today, it is likely that SAB 121 will meet its demise. For example, SEC Commissioner Mark Uyeda in early December 2024 said that it should be withdrawn. This also comes as President-elect Trump has promised a much more amicable attitude toward the crypto industry.
During his time as chief accountant, Munter also issued an unusually high number of statements. His 22 statements and speeches addressed various financial reporting issues, materiality assessment, risk assessment, auditor independence, and audit firm culture.
Munter joined the SEC in 2019, becoming acting chief accountant in January 2021 when then-Chief Accountant Sagar Teotia left the agency following a change in administration with Biden becoming President.
At the time, SEC Acting Chair Allison Herren Lee named then-Deputy Chief Accountant Munter to be the acting chief accountant. Gensler became chair of the SEC in April 2021, but he had neither promoted Munter nor named a new chief accountant until January 2023. Munter is effectively serving as the agency’s top accounting official for two years.
When Gensler became chair, he had interviewed some academics for the position in line with his hiring philosophy. The SEC chief named academics as heads of major divisions. And Munter has a PhD in accounting from the University of Colorado. Before joining the SEC, he was a senior instructor of accounting at the University of Colorado Boulder.
He previously worked at KPMG LLP, where he served as the lead technical partner for the U.S. firm’s international accounting activities and served on the firm’s panel responsible for establishing firm positions on the application of IFRS.
“I thank Paul for his leadership of the Office of the Chief Accountant, his counsel, and his clear accounting advice,” said SEC Chair Gary Gensler in a statement. “As Chief Accountant, he led the office in the critical work of ensuring that investors have access to the highest-quality financial disclosures from public companies. I wish him the best in his retirement from federal service.”
In a statement, Munter said: “It has been the honor of my career to serve investors and our markets as the Chief Accountant for the past four-plus years and lead the outstandingly talented and dedicated professionals of the Office of the Chief Accountant.”
Ro Sokhi, a partner with CPA firm UHY LLP, said he is disappointed to hear of Munter’s retirement from federal service.
“But I am hopeful that Mr. Munter will still have much more to offer to the accounting profession once he retires,” he said. “I had the great pleasure of working with him during our stints at KPMG LLP a decade or so ago. His depth of knowledge and professionalism always shined through. I am not surprised by the impact the Office of the Chief Accountant had under Mr. Munter’s leadership, and wish him well for the future.”
This article originally appeared in the January 15, 2025, edition of Accounting & Compliance Alert, available on Checkpoint.
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