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CFO/Controller without a CPA
Posted Tue, 12/15/2009 - 10:44pm by (Corporate Controller)
Details
1) Besides bulletins from/consultations with your external accountants (and Proformative discussion boards), any other key resources/tips for keeping on top of emerging accounting issues?
2) When job-hunting, how do you deal with a CPA "requirement"? If it's "required" in a job description, do you address it in your cover letter or just tell your best story and hope to be able to get to an interview to sell yourself? How do you answer the question in an interview?
I don't have any great tips for (1), I generally just rely on generic internet searches to try to figure something out, then discuss with our accountants as needed.
For (2), I typically use an example of a complex contract -- explain that I write up a proposed accounting treatment and review it with auditors for approval before making the accounting entries (or even before the contract is signed if we are counting on a particular accounting treatment). Then I emphasize that I wouldn't do anything differently even if I were a CPA -- it is simply "best practice" to handle it at the time the matter arises than at audit, regardless of CPA status.
Also, mentioning an emerging issue (eg FAS 123R) can illustrate that both CPAs and non-CPAs are in the same boat for new regulations -- both need to come up to speed, and CPA status is neither a requirement nor a substitute for doing so.
Other thoughts from this perspective, or from a hiring manager's perspective?
- Accounting
- Job-hunting
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Comments
Thoughts on CPA designation
To your first question, I get an email from the AICPA every day that is a nice update. If you can't or don't want to get a daily email then recommend you just check their website from time to time. Another great resource is the GAAP research tool that I subscribe to from PwC, it is called Comperio. Think it is about $1,500 a year but it is a great tool to keep up to speed on GAAP changes and to do GAAP research. Most large public accounting firms have something like this but PwC's is the best in my opinion, here is a link if you want to check it out: http://www.pwccomperio.com/
As far as your second question goes, I personally don't see the big deal with being a CPA. Yes it is nice to have but I don't think it means anything other than you passed a difficult exam. When I passed it in 1996 (shortly after I finished undergrad) I can assure you that I was clueless about business and how accounting really worked. Experience matters more to me than whether somebody has passed an academic exam.
Think you noted some good ways to overcome this in the event that somebody thinks it matters. Ultimately what matters to me is that somebody is experienced at being an accountant and knows how to research GAAP should that be a necessary skill set for a particular job. Consequently being able to discuss recent GAAP developments such as IFRS, the recent FASB codification, or new pronounceme...
CPA
There is no need for CPA to be a CFO. CMA/MBA/CFA with requisite calibre and soft skills are also competent.
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Good approach!
Andrea:
Been there, done that. I have been a CFO many times and without a CPA I have lead many successful audits. To your point above, it is about understanding which issues are "accounting" issues and that everyone must approach learning about and preparing for these issues in the same way. Heck, unless you are a freshly minted CPA you are in the same boat as others w/o the CPA: learning all the time about the things that matter to your company.
The CPA "requirement" is an annoying one. I find that this requirement is typically part of job descriptions written by non finance folks (that is: written by recruiters, people in HR, or CEOs). They simply don't know any better and like to put up roadblocks in the hiring process b/c they think this produces a better outcome. Ha! Unfortunately, those people will be tough to get around with the logical arguments you have constructed above b/c they just don't know any better. With a CEO, though, you have a better shot - if you can get to him or her to explain. I think that to get there you have to a)write about this in your cover letter and b)discuss technical accounting skills in your resume that would be applicable to the company.
So far as keeping up to date goes, I use Deloitte's online GAAP resource (DART) but it's only as good as the documents included which tend to be codifications, Q&A, etc.. This falls way short when it comes to practical application and that's one thing i really like about Proform...
CPA Requirement
I think Bryan's got it right on getting past HR and recruiters when a job listing has "CPA required," Andrea. There are some companies who want that designation in their CFO and won't consider candidate without it. However, sometimes it isn't required as much as it is preferred. A strong and compelling value proposition can mitigate the lack of a credential (and age bias), but generally NOT if you are responding to a job posting that takes you through HR or a recruiter (who is taking his marching orders from his client company).
Leveraging networking and social media as major search strategies can help you leapfrog the non-decision-making authority of HR and get directly to the guy who is calling the shots.
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CFO must be CPA?
I think for public companies the Board only hires CFOs that are CPAs. Same for private Venture-funded companies. The answer to your question should really be - why do you not want to be a CPA? It just conveys a level of expertise that distinguishes you from 95% of all accountants. It is much safer from a company perspective for a key hire to have credentials that really do show an ability to show mastery of accounting.
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CFO must be CPA?
Either person can go to equal rights prison and jail cell. The courts don't care if you are a CPA or non-CPA. Integrity and reasoning are the keys to being good at anything.
2 out of 2 members found this useful
CPA Requirement.
Obviously the CPA designation is of value to employers or they would not be asking for it. I agree that a CPA designation is not synononous with "qualified for the job" and that someone without a CPA designation may be superior in many ways to someone with. I am simply stating that it is one of the factors on an employer's want list that help tilt the scales in favor of or against a candidate. If you are a CPA then flaunt it, if not stress the qualities that make you the right choice.
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CFO must be CPA
To those who think a CPA is a necessary evil, I possess a MBA in Finance and an undergrad in Economics, but in post Enron SOX companies believe CPAs afford protection for CEOs and CFOs who must attest to accuracy and ethics during SEC filings, annual reports, etc. Currently, it is very disturbing to require this designation for financial analysis, variance analysis, NPV, ROI, etc. when these are forward looking designations that in the past were not the purview of the accountant, who told the story of what just happened. My pose to anyone asserting the necessity of a CPA for the CFO role, weren't most of the Anderson folks at Enron, the accountants at AIG, etc. all CPAs? Certainly did not prevent incompetent, dishonorble, or unethical behavior. A CFO, like a CEO, should be a leader of the financial team, not the manager of it! That is what the Controller and/or the CAO should be! Unfortunately, due the the past 8 years post Enron, CEOs and CFOs have become guardians of the numbers rather than leaders of the results! This must stop!
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CPA not a MUST!!
I have been the CFO of 5 publicly traded companies WITHOUT being a CPA. I have taken a company public and raised money through PIPEs and other complex scenarios. I have successfully argued accounting issues and have artfully answered complex SEC comments. Either you can or you can't
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CPA Requirement
My observations concerning the two questions asked.
First, there are many avenues and resources to keep up to date regarding accounting rules. Likely what is most relevant concerns how the most recent accounting rules changes effect your employer or your preferred industries.
Second, the CPA requirement in the job description.
I am a CPA, and have held this since passing the exam on my first try in 1983. Always have kept mine in active status. Doing this requires meeting minimum annual continuing education requirements.
However, I got my license in Texas, and at the time did not need public accounting experience. Over the years, particularly in employment down cycles, the job description specifications requiring the CPA, also required "BIG" firm experience and an active license.
To me, this is a pedigree issue, something unless you have it will rule you out in the eyes of HR gatekeepers, and maybe with the hiring manager and/or at the Board of Directors level.
I too have been through many external audits by the "BIG" firms, and second tier firms. What a company should be concerned about is the ability to handle and negotiate with the external auditors - and depending on issues, negotiating does come into play - whether this be with fees and/or resolving interpretive issues. Since CPA firms became regulated by the PCAOB, this is not a prevalent now vs. before.
Have seen many discussions regarding the pros/cons of pursui...
CPA requirement
I have been a CFO many times and each time the job description had CPA in it and each time I got the job. Has nothing to do with me, of course, I'm just a run of the mill CFO. But I have very consistently seen the CPA requirement waived. However, it is only waived by people who realize that the CPA is not what makes a great CFO. It's one of many, many elements and as proof there are thousands of very successful CFOs (both public and private) who don't have a CPA.
However, any job description item that you do not possess it is a barrier to be gotten over and one's lack of a CPA will certainly keep you from some CFO/Controller jobs - no question. So I agree with Randal that your operative question here is: is the ROI on getting a CPA worth it? Would your time be better spent on getting your CPA or on doing the myriad other things you can be doing to a)hone your CFO skills to become more hireable and b)actually get a CFO job. I repeat what I noted above, there are thousands (and thousands) of non-CPA CFOs (more rare to find non-CPA Controllers, I think, although I have seen them) and there are many ways to find those who are willing to hire them.
Controller without a CPA
Jeff, I am currently assessing the ROI of getting my CPA designation. I have over 17 years experience in accounting/management with my last two positions being in the controller roll and each time have also carried with it some CFO and HR responsibilities. In addition, I don't have a four year degree (because of a recent layoff, I am taking courses to that end). Most of my positions were requiring at a minimum a four year degree. I was placed in the role because of my experience AND because I had a CPA from a very large accounting firm as a reference. She knew of my capabilities through her contact with my employers. I then had to "earn" the position during my probationary period, which I always did. My biggest barrier seems to be the economically driven tight restrictions on hiring. Also, I can't rely on her to give me an accurate appraisal because she wants to hire me back when the economy picks up. This sounds good but, I don't want to go back there. They took advantage of my educational limitations with respect to salary, knowing that I would have a dificult time finding a position that I am fully qualified for without a four year degree and CPA. I have been networking and it has been suggested that I start my own business in this area because the need is there, but no one company is currently hiring but all are realizing the knowledge value of this position since they have laid them off. I love what I do and I do it better than many but I am at a crossroad as to the C...
CFO/Controller without CPA
Since the above responses cover the area quite well I will keep my response brief. I have been a CEO, CFO and Controller. I am a CPA and have a Masters Degree in accounting. I have worked for public and private companies and have over 30 years experience. In my view, relevant "on-point" experience is number one. Have you actually performed those things that are needed in the new CFO job. Secondly, there are other credentials equal to the CPA designation. Do you have an MBA? Are you a CMA? Do you have a Masters Degree in Finance. Academic credentials and professional certifications are a way to sort out, perhaps, the more cerebral candidates. That said two of the most intelligent and quickest thinkers I ever worked with did not graduate college. Too many recruiters really don't have enough or any experience in the industry for which they are seeking a CFO. It can be intellectually lazy to use a list of credentials rather than a really in depth review of exactly what is needed for the CFO position, for the particular company at this point in time. In the end it is 75% experience and 25% credentials in my view.
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Very well said! Could not
Very well said! Could not agree more.
CFO/Controller without CPA
Many of the comments have two themes. The first theme primarily from CFOs without a CPA, regard the CPA designation as non-essential to their specific responsibilities. The second theme is that many companies use the CPA designation as a screening tool for hiring Controllers and CFO's. I agree with both themes. My background is one of being a CFO, CPA from a "Big 4", CAO and and MBA for over 30 years. I have held significant positions with both public and private entities. Based on my background, I may be biased in that I believe experience that includes a CPA designation and experience from a Big 4 is one piece of relevant criteria in evaluating one's experience level for the position of Controller. In addition to the recognition one receives for obtaining a CPA license, a candidate from a Big 4 has typically received 100's of hours of additional training. In addition, these individuals have been exposed to many different business activities. This serves as a great form of reference when dealing with new internal situations of a particular entity.
There is a reason why less than 5% of all accountants have a CPA certificate. Of that total less than 5% of all CPA's have worked in a "Big 4" environment. Can someone without a CPA handle the rigors of a Controller position? The answer is yes. However, in today's competitive market, individuals who have earned the designation of CPA and have Big 4 experience would be a much easier selection for a first inter...
Current job market
In the current job market, it will be very difficult to get an interview for any position looking for a CPA. You will have to know someone with infuence inside - use your network to its fullest. I have a CPA and find many jobs are "not available" to me because they require "Big 4" experience, which seems discriminatory because the big 4 have only been around a few years - what happened to the "Big 8"?
I do believe the current situation, where job seekers vastly outnumber positions available, is very temporary. Once this turns around, the CPA designation will become much less of an issue for CFO hiring. You just need some way to get through to that point...
I do agree that the CPA designation does indicate some knowledge base, but experience is much more important, especially at the CFO level.
CPA Requirement
Agree with Jim's comment, and would like to offer my perspective as someone who has been a Controller (although not a CFO yet) without a CPA. I am currently in a search and am running up against the issue Jim articulated in the first sentence of his post. It seems that 90% of the top financial positions I have encountered have either "required" or "desired" a CPA. To be certain, the CPA is a "weed-out" tool in this job market (but of course a very relevant and important credential). To this point in my career (and I stress the phrase "to this point"!!), the lack of a CPA has not been an issue... if I can demonstrate sufficient expertise to secure Controller positions without a CPA, I would hope that would carry to the CFO level... but this job market is brutal, and to not have a CPA for a top level financial role is limiting, but not devastating... for myself, it has been somewhere in between.
CFO/Controller w/o a CPA
Last spring, CFO magazine had an article about CFO without a CPA. They found that 60%-70% of Fortune 1000 companies CFO’s do not have a CPA. The percentage of CFO’s with a CPA has been increasing over the last few years due to SOX. I have been a CFO w/o a CPA for several companies. However, I believe in this competitive market not having a CPA has caused me to lose out on some opportunities. As a result, I am currently studying to take the CPA exam. When I am asked by employers about not having a CPA, I tell them that having a CPA would not make me any smarter or better at my job. However, I believe there is a stigma out there especially with mid size companies that believe having a Controller/CFO with a CPA adds some cache to the company.
CFO/Controller w/o as CPA
I have been a CFO for multi national companies more than 20 years without a CPA. In fact, in my capacity as CFO I have hired many CPA's who fail to grasp the nature of business and subsequently created more difficulties for the company than their non-CPA counterparts. There is no dispute that a seasoned CPA has the theory behind him/her but as one person commented, the accounting laws are changing everyday for both CPA and non-CPA which puts them both on level ground. In applying for jobs; If the CPA is a requirement I submit my cover and CV anyways. Sometimes years of experience is taken into consideration.
CFO without a CPA
I have worked as a CFO without a CPA for several companies. The primary reason why I don't have a CPA is due to having earned an Engineering rather than an Accounting degree (though I do have a MBA and have had other financial as well as non-financial related jobs). The primary difficulty that I have experienced in not having a CFA is getting past the gatekeeper (usually HR) for CFO-level positions. On the otherhand, I have found having an Engineering degree useful in serving in high-tech companies and as a consultant, especially for Sarbanes-Oxley compliance work for both the Finance and IT areas. Degrees and certifications are only an indication of the minimum amount of knowledge that someone has (or had). The ability to apply one's knowledge and experiences is what is valuable to an organization.
CFO CPA
I would agree, John, that there are situations where a non-CPA can win a job but would argue that it isn't "years of experience" but rather a "record of positive contributions" over the course of a career that can swing the pendulum.
The real key, though, is the pain connection. A company, requiring a CPA or otherwise, isn't hiring a CFO because there is an empty corner office with a great view and a CFO plaque on the door and they need a body to sit at the desk. A company hires because it has a pain, problem, challenge, or issue it needs resolved or it is stuck and can't move forward. When you can make the pain connection, through a solid record of solving those issues and the quantifiable impact of doing so, the CPA (like age-bias) becomes much less of a factor.
There are, of course, companies for whom the issue is non-negotiable, which is why it is key to understand what you have that a company is willing to pay to get ... and then who will buy it (your target market).
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CFO / CPA
I posted this question on the CFO group on Linked In. John asked me to re-post here ...
If you hold a CPA, have you also held (or do you currently hold) a seat at the executive table guiding vision - or - has / does it keep you (intentionally or otherwise) in a role that is more controls-oriented and less strategic?
Any thoughts? What have you experienced?
CFO/CPA
No, I do not hold a CPA but have just completed a Group CFO role in Russia. I was a principle in guiding the vision of the company and had the board seat to execute the vision. Not having a CPA has not really hindered my ability to play a part in both control-oriented and strategic posts. It would be great if you can re-post this question. However, I must say that the job market being as tight as it is right now, employers have a wide choice of experience and CPA qualified candidates.
CPA being an inhibitor
Interesting question posed by Cindy. I have a CPA and I do feel that at times I am limited to more control oriented type roles. I have found it easy to convince people that I know what I am doing on the accounting and control front but it has been difficult to make the jump to a more strategic role even though much of my experience has been more CFO / strategic oriented. Right now I am feeling like I am in a bit of a mezzanine situation: perceived as being too strategic for pure accounting role but not strategic enough for an executive / CFO role.
CPA as a limiter
No way-I have held several positions that were not primarily financial including VP-Operations, COO, President and General Manager and being a CPA while it may have been irrelevant it was never a limiting factor.
strategic input
It has been my experience that it largely depends on a business's corporate structure and what it views is on the role.
CFO/CPA
I believe there is an alternative certification to a CPA that has value in industry and that is the CMA (Certified Management Accountant). This certification exam covers everything on the CPA exam plus added knowledge such as decision theory, cost accounting, management theory, computer system knowledge, etc. Yet there are very few companies who identify CMA as a required or preferred certification. There are continuing education requirements for CMAs similar to what is required of CPAs.
Along with the CMA comes membership in the IMA (Institute of Management Accountants) which is another great way to stay current on accounting issues and changes through monthly meeting speakers, specific conference offerings, a monthly publication, and the web site.
Another organization that can be useful in the continuing education arena is FEI (Financial Executives International). There are monthly meetings, continuing education sessions, a publication, and a great web site for use by members as a resource.
In the end I agree with many of the comments offered previously - experience and keeping current in the accounting best practice arena are far more important than a certification. I believe employers especially in today's market often use the CPA as a filter to screen out candidates which in the long run just causes them to miss some excellent, well qualified candidates who may actually bring more to the table.
CFO/CPA
I don't have a CPA but everytime I went for an interview that required a CPA license, I got it.
I have held board seats at three different companies overseeing finance and operations. Yes, there are CPAs in our team but not necessarily in a decision-making role.
I will hire a CFO without a CPA anytime as long as s/he has the vision, experience and attitude for the job.
Comptroller General
So I wonder how you feel about the discussion going around Congress and the AIPCA right now about requiring that the US Comptroller General be a CPA.
CPA Requirement
As a CPA, I must tell you that you are correct that just because one has a CPA does not mean that they possess the level of skill for the position. When making hiring decisions, I prefer a CPA but one with at least five years of experience to ensure they have the conceptual understanding of accounting. Keep in mind that a CPA is a subject matter expert in all things accounting, so if they are not well versed in an industry, they have the exposure to obtain the knowledge of the specialized accounting. And since underlying accounting concepts are generally the same (industry accounting rules are different but the conceptually the same) a CPA should be able to adapt much quicker. I think that generally saying that the CPA designation is not a good requirement in a general sense is not a fair statement.
CPA Requirement
Lisa
I disagree on both fronts of the arguement '...CPA is a subject matter expert' and '...CPA should be able to adapt much quicker'.
More often than not, the CPA's from external firms that I have run across do not have the practical expertise. From an academic perspective, they are able to point out inconsistencies but are unable to justify actual exposure or more importantly have relevant the disparities are.
In my opinion, this does not provide a meaningful or value added discussion at all. In the end, these folks ultimately lack the ability to interpret and explain in a rational manner how the information should be used. Lets not forget the 'soft skills' needed to be advisors to business leaders. This has been my goal from the start having been an operator first and an accountant second. You must be able to add value in a cross functional capacity to the business.
To my knowledge, they don't have a standardized test for that and most likely never will.
CPA Requirement
John, I agree that just having a CPA license does not provide the necesary tools to be a controller. Business experience is normally one of the more significant criteria in evaluating prospective candidates. With that being said, the CPA designation is akin to requiring a college degree before a candidate is to be considered for a position. It is nothing more than a first cut for prospective interviews.
There is also a significant issue in hiring that no one has really brought up in these discussions. What is the quality of controller being hired? In many cases, small corporations are looking for nothing more than glorified bookkeepers. I would agree in these type of environments, a CPA would probably not be necessary. However, if there is a fair amount of diversity of issues that a controller will be facing, a seasoned experienced controller with a CPA designation would probably be desired.
The CPA designation also denotes someone has attained a minimum level of knowledge related to accounting. On-going continuing edcuation is required to stay current. In most interviews, there should be a number of questions asked to test the individual on their particular level of expertise in specific areas. Individuals without a CPA license can gain the same industry knowledge. However, it has been my experience that individuals that have attained a CPA license and are active in the job market have maintained a current base of knowledge relating to accountin...
CFO/Controller w/o CPA designation
I agree with practically all of the above comments.
I operated first as a Controller and then a CFO at the same company, without a CPA. During the time I went back and did an MBA and ultimately took an additional 8 accounting and tax classes after my MBA in order to meet my state's (NC at the time) requirements for sitting for the CPA exam. The extra classes took me a year, then studying for and sitting for each section of the CPA exam took a total of a full year. It was a very rigorous exercise and I learned much in the process.
At the end of the day, I decided to do that because I knew it would contribute to my knowledge, and it would deal with the "CPA required" issue once and for all, if and when I ever pursued another role. As it happened, I did leave that company when I moved to Texas and I am glad I did the due diligence to get my CPA license.
As all have said, certainly a designation can only say so much, and not having a designation can't say all that much either. My recommendation would be though, given what is definitely a bias in industry about having your CPA license, that you do try and pursue it if possible as it will help knock down barriers.
It's unfortunate that it works that way out there, but sadly it does often work that way at least at the first line of resume screening.
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CFO/Controller without a CPA - Requirements of firm
Many companies assign the same meaning to the terms CFO and Controller. I found this especially true in my work with HR and Recruiters as chair of the FEI/FENG Career Services group.
Neither HR or recruiter have held the role, so it is difficult for them to appreciate the differences. The approach I've taken is to use the following tool I created to help understand what the company is truly seeking from their finance role: http://candidateschair.com/wp-content/uploads/2008/12/cfo-vs-controller-candidates-chair.pdf
This tool is a comparison duties between a CFO and Controller. I've used with 20+ companies to date. Without exception, after going through this tool, I found what the company says it wants and what it needs is different - simply because I gave them something that laid out the two roles.
While I'll never claim it's perfect, it's sure been useful.
Circling back to the CPA or not, many of the companies found their CPA requirement was not really needed - they just thought it was a standard for a CFO.
Best regards,
Mark
2 out of 2 members found this useful
CFO/Controller without a CPA - Requirements of firm
Mark;
Wow! That is fantastic, not only has the difference been articulated but analyzed in a way that can be appreciated by an objective evaluator.
I am so very grateful and honored to John Kogan for inviting me to Proformative, it is very difficult to find people that think this way. My entire career has put me against this wall, sometimes I win the arguement and sometimes I do not do as well but I continue to push for my arguement all the same.
Warm Regards,
John G Herndon
CFO/Controller comparison chart
Very good chart. The chart makes it clear that strategy related items rest with the CFO, while operational items are under the Controller, with items inbetween shared or variable. This also shows how a CPA makes sense at the Controller level. However, at the CFO level, the CPA designation appears to be much less in need because strategic thinking is needed much more then accounting knowledge. The CPA designation means nothing as far as strategic ability. The MBA designation makes more sense at the CFO level, as most Masters programs will prepare the person to think strategically.
All this is mostly academic as long as it stays within our group of Accounting professionals. It needs to get out to the people who hire the CFOs and Controllers (H.R., CEO's, etc). How do we do this? Any ideas? This woudl be a public service to employers because they will hire people with the right skills instead of the skills they think they need, but do not necessarily need.
chart
I like your chart Mark. But what is your opinion on the evolvement of the controller role into a for lack of a better way to say it, strategic position in that it analyzes and implements improvements, for example, improvements for a companies ability and processes to reduce risk and improve quality control?
Chart - Evolution of Controller role
In the comments above, Randal Shields makes a very relevant remark in the growing complexity of accounting rules. Combined with SOX, IFRS, etc., my networking with fellow colleagues who are Controllers shows that the true issue is available time.
It's best to classify the type of 'strategic work'
Regarding corporate strategy (e.g. business plans, etc.), most have capacity/interest to participate, but not the time to do so effectively.
Regarding strategies for process improvement, quality of data, etc., - this is something almost all have made part of their work. Simply as a way to keep up with the growing requirements without having to add staff.
Hope this helps.
Comparision Chart
Dear Mark,
Your chart is useful and simple to understand. By using this chart, an executive of a company can understand his necessity for financial management of his company simply. Many times, many executives cannot explain their financial requirements to candidates. Sometimes, maybe they need CFO but they are seeking a controller, sometimes they need controller but they are trying to hire a CFO. Simple & useful. Also, this chart also reminds their responsibilities to CFOs and Controllers as summary brief.Well done.
Erhan Merdanoglu
CONTROLLER/CFO WITHOUT CPA
Having seen CPAs whose accounting skills were marginal, and non-CPAs whose skills were superlative, I question the "requirement".
That being said, requiring a CPA is 1) an easy way to pre-screen (read eliminate) a significant number of resumes and 2) allow non-finance types to have some confidence in the candidate's accounting skills (which they otherwise may not be able to assess).
As such, if you know accounting, it's not that difficult to 1) get the necessary educational requirements in an accredited on-line or evening program, 2) pass the exam (I found the Becker CDs very useful, and 3) become a CPA in one of the states that doesn't require experience working for a CPA. Granted, it won't work in every case (i.e., those who seek a candidate licensed in a particular state), but it will work in most cases.
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CPA requirement for CFO
I am an experienced public company Controller and an experienced public company Treasurer. I have an MBA, CMA (Certified Management Accountant) and CTP (Certified Treasury Professional) credentials. I have recently completed the requirements for the CPA license in NC as well and I am awaiting licensure.
There are three reasons why CPA is usually listed as a requirement for Finance Executives. First, as others have posted here, it is an easy, bright-line test to disqualify the majority of applicants. In this job market, recruiters do what they must to manage their workload when faced with the volume of responses they receive. Second, if the position (Controller, Treasurer, Divisional CFO, etc.) reports to a CFO, often the hiring authority is him/herself a CPA and wants someone "just like me". Third, it is often a CYA strategy by the hiring authority in case the hire doesn't work out, or worse.
A CPA friend recently made the comment to me that earning the CPA also indicates the ability to initiate, manage and complete a complex project. He is right. Although we have all successfully completed many projects, how is a hiring authority to know for sure that I was responsible for the success of a project as opposed to taking credit for excellent work done by my staff? When earning the CPA (and the CMA, CTP or some other credential) there is no staff. There is only you navigating your way through a body of knowledge, exams, rules, forms and, in the case of...
A great answer when asked about not having a CPA
I'm always asked about not having a CPA. My quick answer to that is to suggest that the best folks to answer that would be the audit partners at the big 4 firms I've worked with. That and a few more examples of the complex accounting problems I've solved & that usually puts the question to bed.
The CPA designation
Having worked in financial services and within the finance function of public and private organizations, I can tell you that the CPA designation is of import in the obvious area of ACCOUNTING. As an MBA and CFO, I put a great deal of importance on the accuracy of information contained within the systems that support corporate decision-making. I also put a great deal of importance on complying with the relevant and prevalent rules governing corporate accounting. That being said, it has been my experience that the CPA designation offers little in the way of preparing a professional for the rigors of the CFO position in terms of managing and growing the business. You have to have breadth and depth in terms of treasury, banking relationships, currency/FX management, working and investment capital sourcing/pricing/securing, legal ramifications of contract language and the difference between letter and intent of same, people management skills, CEO/Board management skills, analyst/investment banker management skills, due diligence oversight and acquisition/divestiture planning and execution, strategy development, assessment, deployment, execution and adjustment, fostering growth initiatives and risk assumption while curtailing mavericks within the organization (likely to be found in Sales & Marketing, naturally) and limiting liability and exposure for products, services, workforce, internal practices and employee behavior and work product. This doesn't even cover tax str...
Wow
This seems to have attracted a lot of attention, and some long, well-thought-out responses. People can be successful without having a CPA. But the CPA exam is a tough test and the experience requirements make sure that people can use the practical knowledge in an effective way.
Although not everyone needs or wants public accounting experience, it was invaluable training to learn the value of hard work under tight deadlines and sometimes stressful conditions. It also allowed exposure to how CFOs and CEOs conduct business in the corporate world, exposure to big picture and company risk issues, and allowed one to become confident in presentations and public speaking. All-corporate CPAs with no public accounting experience may also achieve the same over time, but think the public accounting path is accelerated.
Non-CPAs can be successful as well, but one with a credential could certainly have a valid edge in a hiring decision, all else being equal. That being said, careers are a body of work so the credential is just one factor in the hiring decision. All else is rarely equal! Because it is so helpful, though, I have not put a priority on getting an MBA.
Some people will also make jokes about CPAs of course and think that we all do continuing education because we love accounting. We do it because education is beneficial and we want to keep our hard-earned licenses, whether we follow Corp. Controller path, CFO path, COO path, CEO path, or some o...
CPA REQUIREMENTS
Those interested in becoming CPAs should note that the requirements vary considerably by state. As such, unless you intend to practice public accounting in your state, licensing elsewhere can be an alternative.
For example, some states require experience with a CPA firm while others will allow experience in a business or government setting, providing that you were supervised by a CPA. (And, one state does not require experience.) This variation extends to residency and coursework as well.
Also, I purchased a review course and found it to be invaluable. It focused on the material to be tested and identified some of the test questions and tricks that one might expect.
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CFO as CPA
Raffy's comments are spot on. I have been a CFO for a number of companies including leading an IPO and the lack if a CPA was and is not an issue regarding getting the job done. Accounting was a very small part of my job and it is always backward looking. Understanding what drives the business and providing forward looking guidance is critical. I think
CPA is included in job specs if CEOs have little background working with a CFO. A good CFO is much mire than the chief accounting officer. In addition accounting rules are constantly in flux so anything learned as a CPA becomes obsolete. A non CPA can keep up with new rules.
CFO as CPA
I consider a mix of CPA's and Non CPA's as corporate Financial officers and Managers not only acceptable, but I consider it essential to prevent the "Guild" mentality from reducing the "well thought out" solutions from being reduced to dogma or ritualistic "solution acceptances".
The CPA is one popular route to senior financial management - but not the only one! Otherwise compliance and SOX would be reduced to an exercise in just accepting a CPA's "Assertions".
James Finn
CFO/Controller without CPA
I believe the CPA requirement has become more of a credibility issue than anything else. The fear started with Enron and Sarbanes Oxley.The state of the economy the last few years has magnified the fears of investors, board members,etc of anything that may cause a business to lose money or go under.I have worked with many competent CPA's, and with some that were totally incapable of thinking outside the box.I agree that a CPA designation is not one of the most important qualities of a CFO or other leader who will be making important decisions about a business.Unfortunately, in this job market I think anyone who is a CPA(all other factors being equal) will be chosen over someone who is not.I have been a Controller, and I know I was paid less and given little respect partly due to my lack of a CPA credential. I am currently working on getting my CPA license-not because I will ever work in public accounting, but because I don't think my career will flourish in this economy without it.I have looked at positions in Europe and Great Britain, and all companies there require some sort of accounting certification-they are flexible on which country it is from, but one does not progress beyond entry level positions there without an accounting certification.I think the US is just starting to do what other countries have been doing for years.