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Must a Chief Accounting Officer have a CPA?

The Controller who works for me has grown up through the ranks of the company from a billing clerk. She has a Bachelors in Accounting and learned everything about SEC accounting on the job when the company was public. The company was bought by a private Brazilian owner and taken private under a UK Holding Company. The Controller's role includes accounting policy and procedures for 25 legal entities spread from China to Australia to Canada to Mexico to UK to Romania. She consolidates these entities, works with external auditors and produces the financial statements for the UK Holding company. She does everything a CAO does per all the descriptions I have read. I want to change her title to CAO - she is at a Director level, below a VP level, and appropriately paid for the work she does. It is only a question of title. The HR VP says she should not have the CAO title because she is not a CPA. What are your thoughts?

Answers

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

Don't get too hung up on the 'certificate". A CPA certificate does NOT and should NOT define the work NOR the title.. It is YOUR department and YOU should be able to decide on what is good for your department.....NOT the HR VP.

Give the "Controller" the recognition he/she deserves for doing a good job by giving him/her the Title that he/she is already doing.

Ask the HR VP if she has got all the certifications that an HR person should have. I am guessing she will back off the "requirement".

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

If you were hiring for the position I would say hold out for the CPA.

But in this situation, she should receive the recognition she deserves. Give her the title of the job she is doing, I.e. CAO.

The question I would be concerned with-- if you do not give her the position she deserves, what message are you sending to your employees?

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

I disagree with Regis here (a rarity). You hire the best person, not letters. Emerson is correct.

The best person has the right broad-based types of experience (see Samuel's posting: https://www.proformative.com/blogs/samuel-dergel/2014/09/10/together-cfos-ceos-create-can-do-culture. The misconceptions, assumptions and stereotypes about all types of certificates and licenses is legendary.

Case in point. I was talking to an acquaintance who was on the JTTF (Joint Terrorism Task Force) in NYC. This was after 9/11. He was working with a team looking for the money. They were flying in IRS agents from all over the country beefing up the team. My question was, were they up for the job? His very good answer was, the best and the brightest in NY may not want to work for the IRS, but there are those who are better and brighter who live in small town USA where the government pay is a good job and they want to stay in small town.

Misconceptions, assumptions and stereotypes make bad predictors of good decisions.

Ern Miller
Title: Co-CEO
Company: Miller Small Business Solutions
(Co-CEO, Miller Small Business Solutions) |

I agree, to a point. A person put in a leadership position should know something about the job the people below him do. The farther you go down the chain, the less knowledge of each step needs to be known.

The reason I find most compelling for this is that a leader needs to make sure the guy he places in charge of something isn't sandbagging. That is, exaggerating the time an assignment will take, the cost, the level of focus, etc. It is human nature to try to get as much of a cushion as possible to ensure completion on time, or better yet, on time and on budget.

I learned this when running my own software company. I had guys who overestimated the time to build a piece of software. I knew how long it should take, because I have been programming for decades. Others tried similar things, but my life experience of being a jack of all trades helped a lot.

Having said that, to reply to the original poster:
If you are confident she can do the job, give her the job and title. If powers that be require a cert, work with her to get the cert as soon as possible. That way, when naysayers complain, explain that she was the best person for the job, and that she is currently pursuing the education.

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

If she displays the technical accounting acumen to perform the job, along with her other competencies (that you already recognize), then the absence of a CPA is not a disqualifier.

If she stays current on accounting rules, etc. then she is all the more ready.

Ask the VP of HR if anyone in his department does NOT have a SPHR certification!

Anonymous
(CFO) |

Your HR VP is all wet. This is your top dog for accounting and finance in the organization. You aren't hiring an auditor. She doesn't need to have a license to audit. Her skills and knowledge are already proven at the firm. It wouldn't have gotten where it did without her contributions.

In the interest of full disclosure, I have encountered this myself albeit indirectly in the past. Working for a successful firm that is bought out by another firm from a more distant place. New owner brings in their HR people who "review" everyone's roles, qualifications and compensation. Then, they determine that the firm has been paying "too much" because so and so doesn't have such and such a qualification.

In my experience, the HR folks often don't have an understanding of the local labor market that the old firm does. And, the HR folks interference in the ongoing operations soon demoralizes the competent staff at the subject firm. Which will lead to dismal events.

Don't even get me started about the very successful SaaS company I worked at in the San Francisco Bay Area (long before that acronym was invented) that got bought out by an old line industrial supplier from Dayton, Ohio. Their HR department immediately went on a tirade about the salaries and benefits that the firm paid and the lack of advanced degrees among some of the higher paid employees.

Funny. The owners of that firm became millionaires in a few short years from the days they started it in a garage - literally - while the buyout firm from Dayton was teetering on financial insolvency and living on their past auto industry glory days. From the 1950s!

Anonymous
(CFO/Board Advisor) |

Just adding my two cents to some of the other comments. Why are you even asking the HR - VP about this? Just tell the HR - VP what you are going to do. If you need permission or approval, go direct to the CEO, lay out your case, make your recommendation for the title change, and ask for the "order". Invite the HR - VP or don't invite the HR - VP, to this meeting with the CEO, your call. Me, I would leave HR out of it. Not all of the best coders have advanced education degrees. Heck, many of the best didn't finish high school - but they rock! Same in our profession. You don't need a CPA to be an expert in GAAP or financial reporting. Reward and recognize your Controller with the new title. Others in your group will applaud you! Many of your peers will too.

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

As a postscript to my earlier comment......

"she is at a Director level, below a VP level, and appropriately paid for the work she does. It is only a question of title."

I do not have information on your organizational plans but this portion of your post tells me that your pay structure is maybe out of whack and might warrant a little rebalancing/rejigging.

If you do not choose her and brought in a CAO, (even one with a CPA certification) you'd be paying the new CAO the same amount of dollars? Which would mean that the CAO and the Controller are paid the same?

From a motivational/morale perspective I would look at giving her an increase in pay (even a token one).

Shawn Rommes
Title: Accounting Manager
Company: CU Companies
LinkedIn Profile
(Accounting Manager, CU Companies) |

I implore you to please not listen to these HR Gatekeepers. Most of the time, they really have no clue what a job entails outside of HR. I'm currently in my second Controller/Director position with just a Bachelors in Business. I've made it to this point in my career because I'm good at what I do. I would have never had the opportunity to be in the position I'm in had the decision to hire me been left to an HR Gatekeeper. Most of them would have insisted upon a CPA or MBA and not paid any attention to my experience. Go with your instincts.

Jeff Durbin
Title: Chief Financial Officer
Company: F. Gavina and Sons, Inc.
(Chief Financial Officer, F. Gavina and Sons, Inc.) |

I agree with most of the people who have posted that we should not let a certification drive the process but I do have a healthy respect for the HR people and the reason they look at these types of things.

Betty Click
Title: Asst Controller
Company: Ward Corp
(Asst Controller, Ward Corp) |

I only had a 2 yr accounting degree when I was a CFO of a company. I then received my CMA(Certified Management Accountant) and CPA, just in case I ever needed to get another job. While studying for the CMA my tutor for the math suggested I get my 4 year accounting degree using much of my real life experiences. His college gave me credit for 13 classes from my experience and I only had to take 40 hours of social studies, etc.
I know from experience that both certifications are from book tests, especially the CPA; but when I am hiring an accountant and both candidates appear to be equally qualified, I may use the CPA as a point in their favor, but only if I feel they are completely equal otherwise.
In your case you know she is doing the job, so give her the title.

Robert Glover
Title: N/A
Company: N/A
(N/A, N/A) |

Betty;
Perhaps this is a bit off topic but I was wondering how you were able to sit for the exams without a Bachelor's Degree. Which in my opinion should not be a requirement because if you know it you know it.

Jeff Durbin
Title: Chief Financial Officer
Company: F. Gavina and Sons, Inc.
(Chief Financial Officer, F. Gavina and Sons, Inc.) |

Robert, I asked the same question on a different response Betty posted. It was my understanding that both CPA and CMA required a certain number of classes to even sit for the exam. Betty apparently found a way around the requirements.

(Agent, JKS Solutions, Inc.) |

I don't think you need it. I've seen many people with the designation that actually know very little about accounting. The CPA just tells you they passed an exam. It does not give any insight into their ability to apply technical knowledge to everyday situations. It sounds like you have an awesome employee on your hands!

Anonymous
(CFO) |

"The CPA just tells you they passed an exam."

Not in many states. One must also fulfill the experience requirement or, they can't claim the title.

Topic Expert
Malak Kazan
Title: VP, Special Projects
Company: ERI Economic Research Institute
(VP, Special Projects, ERI Economic Research Institute) |

A reasonable HR perspective on this issue is filling the position with the best talent. Don't get hung up on designations. At this level, the emotional intelligence of the top talent "knows what they don't know" and either acquires the knowledge/ skills/ abilities or fills the gap with other human capital. Hope this helps.

Laura Morton
Title: President
Company: 10 solns
(President, 10 solns) |

Having fought this issue my entire professional career - having a CPA behind your name does not indicate that you know what you are doing. As an Enrolled Agent (EA) I prepare and advise on taxes and I continue to correct and clean up previous CPA errors.

My 20 years of experience in taxes and accounting should go a lot farther than having credentials behind my name. I am self employed but if I chose to get a 'real job' as we call them, I could not because I don't have those coveted 3 letters behind my name.

Hire people for their qualifications and not the pieces of paper they have earned for going to a class consistently.

Glad that you are promoting from within and you are hiring the best candidate!!

Anonymous
(TLA) |

I can not retain my self not sharing my experience with you. I was in the same situation five months ago except i was the controller:). Our CFO leave and our Country CEO suggested me to take the position. The whole management board voted for me and the suggestion was sent to the group HR and the Group CFO. I was rejected with explanation that i have no managerial experience. Our CEO could do nothing. The rejection was sent from the group CHRO even when the group CFO propose for me to take the "Acting" CFO position for 6 months and than to make the final decision. The CHRO rejected all. I was very frustrated and decide to leave after 12 Y in that company and wright now i'm counting the last days. I found new job, its not CFO but team leader in accounting in a much grater company and I was told by the new company CFO that I've had the best tests results on accessions that she has not see in years.
I felt the sharpness of the HR knife and believe me it not cut only the candidate but also the company.
I hope that my story will help you to waken the lion in you and fight for that controller and give her the title she earned.

Peter Ikenweazu
Title: Chief Accounting Officer
Company: Presco Plc
(Chief Accounting Officer, Presco Plc) |

I want to believe that your HR VP is one of those tag defending conservative professionals around. If your remarks above are yardstick to go by,then the recognition is well deserved and the Controllers should be so recognized.

Jeff Durbin
Title: Chief Financial Officer
Company: F. Gavina and Sons, Inc.
(Chief Financial Officer, F. Gavina and Sons, Inc.) |

There are two issues here and because of the way you phrased the question everyone is focused on one of them. Everyone is talking about if your HR person is 'right' and most appear to be arguing she (or he) is wrong. The unasked question is "should you have a CAO?" Perhaps her title should be changed from Director of Accounting (or Controller) to Corporate Controller. There is no law that says your firm must have a CAO.

Regarding the specifics of certification, I found that the CMA was more effective for someone doing corporate accounting whereas the CPA was more appropriate for an auditor. When I was consulting for Resources Global Professionals I got the CMA because it made more sense.

There are two advantages of certification, as I see it. First, it ensures a high level of knowledge. There are plenty of people who have taken a full load of accounting classes that fail these certification tests. I relearned plenty of topics when I got certified many years after business school. Second, they require continuing education in order to maintain the certification (which is why my CMA has lapsed.)

Certification isn't the be-all and end-all but if I were that Director of Accounting I would want the letters behind my name.

Robert Glover
Title: N/A
Company: N/A
(N/A, N/A) |

Both the CMA and the CPA require a Bachelors Degree with the CPA having the added requirement, depending on the state, of a certain amount of credit hours in accounting.

Rick Rusch
Title: President
Company: Secure ERP, Inc.
(President, Secure ERP, Inc.) |

My answer (after only reading your question and skimming the comments) Fire the HR VP! This person is far too hung up on CYA. (in my humble opinion) Ask this person if he would rather be led into battle by a Sargent after 3 tours of duty or a Lieutenant fresh from the academy? Enough said! (feeling feisty Wed. evening.)
My greatest concern is the HR VP is turning away better qualified persons in order to get credentials.

Sally Brandtneris
Title: VP and CFO
Company: Stefanini TechTeam
(VP and CFO, Stefanini TechTeam) |

Thanks so much to all of you for your thoughts and insight! Yes, the HR VP is ultra conservative and highly political. Since the CEO is a Brazilian, the HR VP influences him unduly on how to run a US company. I spoke with the CEO today and he is concerned about the "chief.." Title, worried that others will petition for the same. I looked up Corporate Controller as an alternate and it is defined as "chief accounting officer". What do you think the difference is between corporate controller and CAO? Remember we are a highly global company.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

I feel better.... after reading most of the comments here I see a recurring thread, that the Finance/Accounting (or Accounting/Finance) Department sees little to no value for the Talent acquisition aspect of HR.

I think we can all agree that the compliance aspect deserves all our respect.

Konrad Sosnow
Title: Revenue Recognition Guru
Company: Konrad M. Sosnow & Associates
(Revenue Recognition Guru, Konrad M. Sosnow & Associates) |

Ability to perform the job should be the only criteria. We all have met CPAs whom we wouldn't trust to do basic accounting and non-CPAs who have been great CFOs.

Topic Expert
Patrick Dunne
Title: Chief Financial Officer
Company: Milk Source
(Chief Financial Officer, Milk Source) |

I usually think of the CAO as the 1st or 2nd in command. If you consider this true, I would make the move. The CPA certificate does not matter as the person clearly demonstrates the technical knowledge.

Topic Expert
Scott MacDonald
Title: President/Owner
Company: AlphaMac Resources, Inc.
(President/Owner, AlphaMac Resources, Inc.) |

My questions is if she is so knowledgeable, why hasn't she tried to for her CPA certification? It would make her infinitely more marketable. Someone should be encouraging her to get the required college credits (as many states now require the equivalent of a masters degree to sit for the exam) and take the exam.

No mention in your write up about how the Board or other senior managers view her lack of professional certification. If other C level positions require some type of certification, then you will have friction at that level.

Anonymous User
Title: CFO
Company: Local Government Agency
(CFO, Local Government Agency) |

Because she didn't want to be an auditor and, to gain the required experience to meet the CPA requirement, she'd have to trade down substantially in compensation and prestige while she groveled under some senior partner at a CPA firm for a couple of years. That might be fine for someone just out of school but, once you've started building a career, it is difficult to go back down the ladder for a redo.

I attempted this myself during a long period of un/under employment. I decided that, as I wasn't making a decent salary anymore and the lack of a CPA was a barrier to my getting back in the game, I'd get past the exam and get my audit time in as fast as I could. Good luck finding a CPA firm that will take you in under these circumstances. They see you as not being as malleable (and gullible) as a recent graduate and don't really want to deal with you.

Besides, in my own experience, when HR is calling for a CPA they also usually insist it be from a national firm. The big firms are completely oriented in college recruitment and not interested in anyone with experience looking to get in, except in the case of those already in the audit industry.

Topic Expert
Scott MacDonald
Title: President/Owner
Company: AlphaMac Resources, Inc.
(President/Owner, AlphaMac Resources, Inc.) |

The CMA certification might be an option if the CPA is out of reach. The issue become credibility, both internally and externally. A certification, rightly or wrongly, shows a certain level of commitment and knowledge.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

I have never been looked down upon in any meeting with any "licensed/certified" professional for not wanting to be or obtaining a certification/license.

Again, we are too obsessed with justifying our own decisions (think young Interns at hospitals who still work 20+hour days for months at a time -- who is benefiting here [besides the hospital maybe], not you the patient, because that young Intern is too tired to think properly, but the medical industry chugs along with the same old thinking, because that's what "I" had to do to become a doctor).

You either know what you are doing, make that knowledge accessible or you don't. I know I keep repeating this, but just because you past a test, doesn't mean you know what you are talking about.

Everton McNaught
Title: Chief Financial Officer
Company: Priority Group of Companies
(Chief Financial Officer, Priority Group of Companies) |

Promoting from within is always a good motivational tool.
She has displayed the requisite skills to get the job done properly, therefore she should be promoted.

However, she must be encouraged to pursue certification and keep in touch with the constant changes in financial reporting standards. This will help her to become more marketable and enhance her chances to move up the corporate ladder.

Mary Boettcher
Title: HR/HRIS Specialist
Company: Marion County, Oregon
(HR/HRIS Specialist, Marion County, Oregon) |

The one thing I do not see addressed here is what is your past practice and are you setting a precedent that you may not want to continue given a different employee and different situation? Do you have written job descriptions for your positions that include minimum qualifications? Doing this for one person in your company may put you in a position for someone else to claim discrimination later. I think it is wonderful to promote from within and I support this whole-heartedly but you do need to make sure to protect your company legally and ethically, as well. If you can "reclass" her position to a different title that meets the job duties and it doesn't require the certification, this would be a win-win scenario.

Also, while you are the VP and CFO, I think it would be unprofessional for you to "go after" the HR VP and ask if everyone in the HR Department has credentials. Nobody likes a bully and it will only create an atmosphere of tension, bad feelings, and possibly worse. I don't think you want that in your company. She is doing her job and trying to protect your company. Can you honestly say that you know all the laws (state and federal) she has to make sure your company must follow? Having said this, I am also not a proponent of credentials meaning you know all and can do all. I think many years of experience outweighs credentials; especially if that experience is within your own company. Still, you need to make sure you are doing the right thing for your company and for the employee.

Regarding pay with the title change, make sure you do a market review of similar jobs in the area and, if a pay increase is warranted, give it to her; if not, don't and you will have documentation to support the decision.

Finally, depending on the employee's goals, you might consider starting a professional development support fund (if you don't have one already) so the employee can obtain the education/credentials that are required by other companies/organizations for the same or similar job. If the employee is forced to move onto another job down the road, due to circumstances beyond her control, she will have the experience and the credentials to help her land another like position without needing to fight the "credential/no credential" battle. Life happens and it is best to be prepared for it. Also, you will be able to capitalize on the experience and skills that other current employees have that are specific to your company to grow and prepare them to move up when/if the opportunity presents itself. In addition, you will have overall better employee loyalty, satisfaction and retention.

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