In a company it is the controller who is head of accounting. Therefore, the person in this role should have ultimate responsibility for accounting and reporting. The CFO’s responsibility is something different. The person in this role should understand how the company operates and secure the necessary financing for growth and operations.
According to an article on the cfo.com website, the respective roles of the CFO on the one hand, and controller or chief accounting officer on the other, seldom overlap. Therefore, the best background for a CFO is a treasury function or a role in financial services. People with a background in the public sector usually do not possess the necessary knowledge of financial markets. Thus they will not be able to fulfil the role of CFO.
If weak controllers hire a CFO expecting that they will become a more-trusted controller or even chief accounting officer, it will not end well. If there are two executives focused on accounting, both may lack the required experience with financial markets.
Don’t mix the roles of CFO and chief controller
A company is typically served quite well if its controller has experience in financial management.
Of course, a CFO contributes to financial statements and reporting, and uses them as well. However, this person should have a background in banking or financial services, and not be ultimately responsible for reporting. The CFO should not be able to influence how the controller executes their authority over accounting and reporting. The ideal situation is when these two roles are kept separate and the people in them answer directly to the CEO. That way the CEO and external auditors will have greater confidence in financial statements.
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