In the business world, chief accounting officers and chief financial officers are two high-level management positions. Both need to have many years of experience in financial management and are in charge of similar business activities, but their jobs are very different. Chief financial officers are responsible for planning the financial future of a company, while chief accounting officers handle the more day-to-day activities.
The chief accounting officer may be in charge of many aspects of a company's accounting, budget, treasury and auditing operations. One of the CAO's main duties is overseeing the accounting department to ensure that the company's financial records, forecasts and reports are accurate. They are the people who come up with accounting policies and procedures, so they need to have a firm understanding of generally accepted accounting practices. CAOs often have significant compliance duties. They need to prepare reports for regulatory agencies like the Securities and Exchange Commission, set up controls to ensure regulatory compliance and work with internal and external auditors to make sure that those controls are effective.
Chief financial officers are in charge of every aspect of a company's finances and often report directly to the chief executive officer. The CFO helps shape the financial goals of a company then develops and implements the strategies a company needs to meet those goals. They advise top-level management on the financial impacts of any new contracts or business dealings. They also plan and implement acquisitions, mergers or expansions. The CFO often helps companies find new avenues for investing company funds, makes projections about new investments and maintains relationships with investment partners. She is also responsible for planning compliance strategies and helping management determine the impact of new legislation.
The technical knowledge that both CFOs and CAOs need to have are similar. Both need to have a firm understanding of accounting and finance standards and techniques, particularly when it comes to reporting and compliance with regulators, internal compliance controls and auditing. CFOs and CAOs also usually have very similar, possibly identical, backgrounds. For both jobs, you need at least a bachelor's degree in a subject related to finance, though many employers prefer candidates with a master's of business administration. You need to have about a decade of experience in departments related to finance and usually several years of management experience for both jobs.
Differences and Choosing a Path
The largest difference between CFOs and CAOs is that CFOs plan and guide every aspect of a company's finances, while CAOs are concerned more with ensuring that accounting and possibly a few other finance-related departments are working properly, and that their work is accurate and complies with regulation and company policies and objectives. You need to be comfortable with a tremendous amount of responsibility for either role, but a CFO ultimately has more control over the direction of a company. So, if you enjoy the technical side of accounting and finance and are a great leader, a CAO position may be more attractive. If you have big ideas and are comfortable with taking responsibility for those ideas, a CFO position may be your best bet.
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