Quick Look:

  • The U.S. Securities and Exchange Commission (SEC) issued a press release on Friday appointing Kurt Hohl as its new chief accountant. Hohl previously served at the agency from 1989 to 1997 and worked for 26 years at Ernst & Young, one of the Big Four accounting firms. His appointment takes effect on July 7.
  • Hohl succeeds Paul Munter. Munter served as acting chief accountant for about two years before becoming the permanent chief accountant (starting in January 2023) and stepped down in January. Ryan Wolfe, who has been acting chief accountant since January, will return to his role as chief accountant in the enforcement division.
  • New SEC Chairman Paul S. Atkins (nominated by President Donald Trump) said in the press release that he overlapped with Hohl during his time at the SEC and worked with him. Atkins stated in the announcement: "Kurt is a seasoned accountant with deep expertise and technical ability, as well as international experience, and we are fortunate that he has decided to return to the SEC. Having worked with Kurt before, I know his integrity and skills will benefit our markets and investors."

In-Depth Analysis:

Hohl takes office at a critical time for accounting regulation. A sweeping tax bill moving through Congress includes a provision to abolish the Public Company Accounting Oversight Board (PCAOB)—the regulator that oversees accounting firms that audit public companies—and fold its responsibilities into the SEC.

Nicole Wright, an associate professor of accounting at James Madison University in Harrisonburg, Virginia (Hohl's alma mater), said that while Hohl's audit and broad accounting experience could help the SEC take on PCAOB duties, the task would be a huge challenge for any overseer.

Wright wrote in an email response: "If this actually happens, the transition period will be difficult for anyone, and I'm not sure anyone could be 100 percent ready to achieve a smooth and effective transition."

Hohl is a certified public accountant with a Bachelor of Business Science in Accounting from James Madison University, and began his career at Deloitte Haskins & Sells. According to his LinkedIn profile, during his time at the SEC, he served as deputy chief accountant in the Division of Corporation Finance, wrote an employee training manual that became the primary reference for SEC accounting staff in interpreting and applying federal securities laws, and authored SEC Staff Accounting Bulletin No. 92, which addressed environmental contingencies.

At Ernst & Young, he held various positions, most recently as vice chair of global assurance professional practice, overseeing the technical, regulatory, risk, and quality management functions of its professional practice and leading a team of more than 1,400 people.

Hohl said in a statement that this is a "pivotal moment" for the capital markets and that he looks forward to working on "advancing accounting and auditing policies to enhance investor confidence, increase transparency, and support innovation."

Shortly after leaving Ernst & Young in June 2023, Hohl founded Corallium Advisors, a firm that helps companies with auditing, regulatory compliance, and initial public offerings.

The SEC did not respond to a request for comment on Hohl's plans for his new position. During his tenure, his predecessor Munter used the role to emphasize the importance of accounting regulators and various financial reporting issues, delivering several strongly worded speeches that appeared to align with the stance of then-SEC Chairman Gary Gensler.

For example, while serving as acting chief accountant in 2022, Munter pointed to signs of declining "professionalism" among staff at some large accounting firms, as CFO Dive previously reported.

According to the SEC website, the Office of the Chief Accountant is responsible for protecting investors and serves as the SEC's principal advisor on accounting, auditing, and internal control standards, as well as financial reporting regulation.