The chief accountant at the US market regulator has resigned, following his former boss Harvey Pitt out the door.

Robert Herdman, who worked with Mr Pitt on the founding of a new US accounting oversight board, tendered his resignation to the Securities and Exchange Commission (SEC) late on Friday.

I submit this resignation in light of recent events

Robert Herdman

"It is with profound regret that I accepted Robert Herdman's resignation this afternoon," said Mr Pitt, who resigned himself on Tuesday over the botched appointment of a chairman for the new accounting board.

The hiring of William Webster to drive the clean-up of corporate America proved controversial after it emerged he had been involved with a firm accused of accounting irregularities.

There is speculation that Mr Webster could also resign within days, following new claims about his business dealings.

He is reported to be considering whether to stay on as chairman of the board set up to oversee the US accounting industry.

Stricter accounting

The reputation of the US accounting industry has been tarnished by the prosecution of Arthur Andersen over its role in the collapse of Enron, and a string of other accounting scandals involving a variety of firms.

In his letter, Mr Herdman said: "I submit this resignation in light of recent events."

He added that decisions to be made by the SEC on new accounting legislation would have greater impact without him.

"The objectivity of those decisions will be enhanced if someone other than I functions as the commission's principal advisor on accounting matters," he added.

Under pressure

The fresh resignation briefly took the spotlight off Mr Webster, who is mulling his current position.

Earlier on Friday, he said: "I've said that I would be reviewing the situation after the [mid-term] elections... to see whether all the things that are still hanging out there would detract from or impede the work of the board."

"That's still my intention."

"If I make that determination I will step aside. At this moment, I have nothing to announce."

Mr Webster, a former head of both the CIA and FBI, has sent fellow members of the Public Company Accounting Oversight Board agenda papers for an inaugural meeting, set for Wednesday.

Disputed claims

The comments came as Mr Webster faced claims that, in a previous role at troubled US investment firm Technologies, he dismissed accounting firm BDO Seidman as auditor after it warned in July 2001 of financial problems at the company.

Mr Webster, then head of US Technologies audit committee, has said the decision to axe BDO was based on cost, and that he has "no recollection" of the warning.

"The inference is that we replaced the auditor because they were issuing warnings," Mr Webster told the Wall Street Journal newspaper.

"That's totally incorrect - we just couldn't afford them."

BDO, which is suing US Technologies, has accused Mr Webster of making "false and misleading statements", the WSJ added.

US Technologies, which Mr Webster resigned from in July 2002, also faces investor lawsuits alleging fraud.

Pitt's resignation

Mr Webster's links with US Technologies have already been implicated in the resignation of Mr Pitt as chairman of the SEC.

Mr Pitt, already criticised over his response to the numerous US corporate financial scandals over the last year, was attacked for allegedly failing to tell fellow members of the committee that appointed Mr Webster of the US Technologies link.

Mr Webster has said "as a fact" that he told Mr Pitt of the US Technologies issue.

The SEC has set up an internal probe into the appointment.

In a final swan-song speech on Friday, Mr Pitt said: "I hope my successor is not greeted with the same climate of attack and partisanship.

"It is easy to find fault and it is easy to criticise."