In Memoriam: Benjamin Neuhausen
Profile of Accomplishments
Ben had impeccable professional credentials, and he was accomplished in
a number of roles. Below are brief highlights of a life well-lived.
MBA and CPA.
Ben received his MBA in accounting from New York
University, and he was certified by the states of Illinois and New York.
Early in his career, Ben had the honor of becoming the first FASB fellow
from Arthur Andersen.
Ben was a partner first in Arthur Andersen and later in BDO Seidman
following Andersen’s break-up.
AcSEC member and
Later in his career, Ben played a leadership role in the AICPA’s
Accounting Standards Executive Committee (AcSEC). He was a member for 11
years and chairman from 2005 to 2008. He was also an active and welcome
member of the IMA’s Financial Reporting Committee.
Together, Ben and I wrote a huge arsenal of works about accounting -
some technical, some plain English. These works included internal “FASB
Flash Reports,” external “Client Advisories,” “Financial Reporting”
newsletters, and a slew of bylined articles for Tax Analysts and other
publications ranging from a chapter on Financial Reporting for the
“Corporate Controllers Manual” to a book of interpretations on
“Accounting for Business Combinations” for Accounting Research Manager.
Just this past year upon completion of his AcSEC
chairmanship, Ben received the AICPA
Special Recognition Award for his outstanding contributions to standard
setting in the accounting profession.
organized two teams for the 2008 Lustgarten Foundation’s annual Chicago
walk to raise funds for pancreatic cancer research, and his efforts made
the walk a huge success with the largest number of walkers ever in the
history of the event. All told, he raised more than $100,000 that year.
Lustgarten has since created a Ben Neuhausen Research Fund in his honor.
Donations may be made by sending a check payable to the Lustgarten
Foundation with “Benjamin Neuhausen Research Fund” in the memo line, or
by typing the name of the fund in the Tribute Information area (where it
says the gift type is “In honor of”).
on this list, but typically foremost in his mind, Ben was the proud
father of a daughter and two sons. He spoke glowingly of his three
children and their plans, and he made it a priority to set aside quality
time to bond with them and with the many others in his family, faith and
circle of friends who formed his central support group.
By Rosemary Schlank
August 5, 2009
does the world see an accountant with such an engaging leadership style.
From FASB fellow to Andersen partner and AcSEC chair, Ben Neuhausen was
that rare breed of accountant who could thrive amidst the pressures of
the technical side of public accounting. When clients, co-workers, or
professional colleagues approached him with questions, they could sense
his genuine interest in the issues; and his knowledgeable interactions
with them would always leave a lasting impression, no matter what their
individual areas of expertise.
lost his courageous battle with cancer on July 31, 2009. His influence
in the profession and in our lives will be missed by all, and especially
by me. I had the good fortune to meet Ben when he was national
accounting director of a major accounting firm. In that role, he became
my boss, co-author, confidant, and friend for six years from 2003
Intellect, Literacy and Courage
the years we worked together, I often tried to analyze the keys to Ben’s
success. There were three basic areas in which nobody else could even
First was his incredible intellect and straight thinking. Ben could
use facts and logic to put differences of opinion in perspective and
win over even the harshest of skeptics. Maybe he was born with that
talent. Or maybe he acquired it at Arthur Andersen. He was an
Andersen partner for 17 years from 1985 to 2002, mostly in the
professional services group. That timeframe brings back memories of
the Big 8 days and the hey-day of Andersen’s reputation for being
the “powerhouse” firm. It was never hard to picture Ben’s intellect
as an integral part of that powerhouse.
Second, and less obvious to others but equally impressive to me, is
a trait that I would describe as his literacy, not just financial
and accounting literacy but any kind of literacy. He had a keen
appreciation of the written word, and a mastery that allowed him to
cut through the technical jargon and go right to the bottom line on
a wide range of subjects from “shadow banking” to “naked
short-selling.” That skill was especially crucial in our working
relationship because my projects sometimes went beyond GAAP and
because Ben was based in Chicago while I was in NY. Much of our
communications took place by email. No matter how rambling the
questions or how varied the subjects, Ben’s reply was always
precise, factual, and focused.
Third was the courage with which Ben stood up to challenges, both
big and small. The challenges ranged from bad accounting, to the
Enron hearings and break-up of Andersen, to the workaholism that
often afflicts those who choose public accounting and ultimately to
the terrible diseases that took his wife and claimed him as a
victim. He fought his own courageous battle with cancer while he was
in the prime of his life, at the top of his profession, and with
three children still in their formative high school and college
years. Through it all, Ben had the most indomitable spirit and
positive attitude anyone could ever imagine. Even in the rehab
center in the final month of his life, hobbled by a broken knee and
unable to put any weight on one leg, he sounded cheerful and assured
me he was “in good spirits.”
his distinguished career ended far too soon, Ben’s accomplishments were
many, and he leaves us a rich legacy of memories that are overflowing
with lessons in both literacy and life. To the right is a profile of his
accomplishments and below are highlights of his views.
Lessons in Literacy and in Life
are countless lessons to be found in Ben’s views. Below are a few of my
favorites. Some of his words are paraphrased, but I tried my best to be
true to his thinking.
The debates about principles-based versus rules-driven standards are
over-simplified and often create an artificial dichotomy. The
highest quality accounting standards must reflect an “artful blend”
of underlying principles and implementation guidance. Neither works
well without the other:
accounting standards contained rules with no underlying principles,
they would render accountants incapable of answering questions that
aren’t explicitly addressed because no framework would exist to
analyze the questions. This would lead to accounting for “form over
substance” and create an environment that fosters what some call the
“lawyering of accounting.”
the other extreme, if standards contain principles with little
implementation guidance, they will fail to provide clear answers to
specific questions. Such standards could result in diversity in
practice and noncomparability that is opaque to users of financial
statements. There is also a risk that such standards could lead to
the second guessing of reasonable judgments, thereby creating
unnecessary exposure for preparers and auditors.
US regulatory environment.
Accountants from outside the US who criticize US standards as overly
rules-focused and tout the benefits of a principles-based approach
generally operate in an environment with comparatively little
oversight and relatively benign litigation exposure. No other
country has a level of regulation and enforcement comparable to that
provided by the US Securities and Exchange Commission. When their
own standards are unclear, other accountants often look to US
Future US adoption of IFRS.
A market-driven approach to voluntary adoption seems better than an
SEC mandate requiring adoption, at least as a starting point to see
how investors and other user groups will react to IFRS for US
companies. If the SEC decides to allow use of IFRS by US
registrants, US accountants will need to assess whether this country
should continue to have its own national standard-setter and/or some
other source of implementation guidance. Factors to consider
include: (a) whether the US needs more detailed guidance and more
industry guidance than other countries to meet the expectations of
the SEC and the US legal system, (b) whether and to what extent
private companies might prefer to stay with US GAAP, and (c) whether
there would be a continued (and perhaps increased) need for
nonauthoritative guidance (such as the guidance AcSEC now provides)
under a framework with more choices and alternatives.
Complexity in accounting standards.
Some critics of US GAAP see the US interpretive and implementation
guidance as a source of complexity. That view is misguided. The
level of detailed guidance is more typically the result, not the
source, of complex accounting. If principles create complex
accounting or the underlying transactions are complex, then
interpretive and implementation guidance is needed to achieve
comparability. Without an organized process for providing such
guidance, the costs and burdens of the accounting will fall on users
(to decipher noncomparable accounting) and/or on preparers, auditors
and others (to create the guidance on an ad hoc, piecemeal basis).
most significant causes of complexity in US GAAP include complicated
principles, conflicting principles, and conflicting implementation
guidance. An example of a complicated principle is that, “a lease
that transfers substantially all of the benefits and risks incident
to the ownership of property should be accounted for as the
acquisition of an asset and the incurrence of an obligation by the
lessee… All other leases should be accounted for as operating
solutions to complexity include: (a) Making simplicity a
consideration is establishing new standards, (b) Using existing or
familiar principles, classifications, computations, etc., whenever
possible, and (c) Amending existing standards to eliminate
inconsistencies in principles, implementation guidance,
computations, etc. The intent is not to prohibit new thinking but
rather to encourage consideration of all precedents and parallels,
determine whether the new principle has a substantial benefit, and,
if so, amend the prior requirements when appropriate, thereby
minimizing the number of different requirements that accountants
must remember and apply.
Judgment and substance.
Economic-substance-over-legal-form is an important principle for
accountants. But this principle alone is not the solution to
complexity. Some have suggested that the FASB clear away the rules
and implementation guidance and let accountants simply use their
professional judgment to more clearly convey the economic substance
of transactions and events. That won’t work because, in reality,
accountants in good faith sometimes disagree vociferously over the
economic substance of transactions. Further, even with extensive
implementation guidance, it is not uncommon to see after-the-fact
criticism of accounting for transactions that generated revenues or
gains for enterprises that later failed. At times, the critics seem
to suggest that the accountants should have known that the business
was failing and should not have allowed the recognition of revenues
or gains that gave the appearance of financial health, regardless of
the merits of the accounting.
role of the board of directors.
Boards of directors in general and audit committees in particular
play a critical role in financial reporting. They should be
proactive in evaluating the quality (not just the acceptability) of
a company’s financial reporting and the adequacy of its disclosures.
If there is a golden rule for financial reporting, especially in
difficult times, it is to abide by the spirit as well as the letter
of accounting standards. Admittedly, a lofty ideal, this approach
leaves room for interpretation and it demands considerable
discipline and professional judgment. A good corollary is that
companies should make more detailed disclosures especially about
items thought to influence the quality of their earnings or the
reliability of their ratios. Directors can ask probing questions to
help determine whether these reporting goals are met.
Disclosures as short-term fixes.
Accounting standard-setters should keep in mind that disclosures, no
matter how voluminous and well-intentioned, are no substitute for
good accounting principles. Increasingly, to provide flexibility in
scheduling projects, the FASB appears to be using added disclosure
requirements as bridges to better accounting that have not yet been
agreed upon with the International Accounting Standards Board (IASB).
This approach is suboptimal because the disclosures become a
compromise solution and the series of short-term fixes adds up to
more changes than necessary.
need for a comprehensive disclosure project.
If disclosure requirements must be established on a piecemeal basis,
this process should be accompanied by a sunset process for
reevaluating disclosure requirements periodically and removing the
ones that may have been rendered unnecessary by subsequent changes
in accounting requirements of related standards. However, the best
option would be for the FASB to undertake a more systematic and
comprehensive approach to disclosures. Such an approach would
include: (a) establishing the objectives and purposes of the
disclosures, (b) integrating related disclosures rather than having
them appear in separate notes to the financial statements, (c)
eliminating redundancies and excessive detail, (d) conforming
disclosure requirements for GAAP and IFRS, and (e) eliminating
redundancies in GAAP and SEC requirements.
XBRL and SEC’s 21st century disclosure initiative.
XBRL is a promising approach for making financial statements more
user-friendly. A report released by the SEC as part of its 21st
Century Disclosure Initiative describes survey results that show
many readers already find US disclosure documents too long and
wordy, with the result that they prefer to get their information
another way, such as through a broker or financial analyst. The
report is entitled “Toward Greater Transparency.” The findings of
the report and the integration of GAAP into the SEC’s interactive
data rules reinforce the need for the disclosures project and for
the FASB to work with XBRL US on the integration of the GAAP
codification into the taxonomy. (XBRL US and the FASB announced the
integration of the codification this week, and XBRL US CEO Mark
Bolgiano described Ben as “a key supporter of the XBRL movement, and
a valued advisor on the XBRL US GAAP project from the very start.”)
Putting it in perspective.
On a personal note, Ben credits his beloved wife,
for convincing him of the need to balance his work demands and
professional activities with quality time spent with his family. He
didn’t let her down. He tried to minimize his out-of-town travel
commitments, except when unavoidably detained, as he was in NYC
after the terrorist attacks on September 11, 2001. (Ben was in NY
for an AcSEC meeting.) When Andersen broke up, Ben joined a second
tier firm so he could stay in Chicago and wouldn’t need to uproot
his family. Truthfully, he was still a demanding taskmaster for
those of us lucky enough to work for him - but in ways that couldn’t
help but make us smile. For example, he would say, “Write the FASB
meeting report for the other accounting firms, but don’t spend more
than two hours on it.” (Ample time for one with Ben’s knowledge,
tight for us mere mortals; but it was always a privilege to put in
the extra hours to earn Ben’s trust and respect.)
With Ben’s passing, the world has lost a great
accountant and a wonderful person. He truly made the world a better
place, and the lessons he taught us will live on and will continue to
make it an ever better place. Anyone wishing to donate to the Ben
Neuhausen Pancreatic Cancer Research Fund may do so at
don’t forget to enter the name of the fund in the box at the bottom for
2009 Center for Financial
and Accounting Literacy
Article about Ben in Journal of Accountancy, August 2008
Article about Ben in Journal of Accountancy, June 2009
Article by Ben in Directorship magazine, June 2009
Tribute by Financial Executives International
Sign Ben's Guest Book in the Chicago
Make a donation to the
Ben Neuhausen Pancreatic Cancer Research Fund
enter the name of the fund in the box at the bottom for “Tribute
to the Lustgarten Chicago walk