(Strategic CFO)
First revision: Aug.21, 2019 
Last revision: Aug.26, 2019
1. CFO's Roles and Responsibilities
     Who is CFO?
  • The Chief Financial Officer (CFO) is a corporate officer primarily responsible for managing the financial risks of the corporation. This officer is also responsible for financial planning and record-keeping, as well as financial reporting to higher management. (Source: Wikipedia)
  • The senior manager is responsible for overseeing the financial activities of an entire Company. The CFO's duties include financial planning and monitoring cash flow. (Source: Investopedia)
  • CFO is the senior-most executive responsible for financial control and planning of a firm or project. (Source: Businessdictionary)

    A CFO has to
  • Understand the operations of the business and how the financial system interrelates with activities.
  • Understand capital structures and business funding and know-how to manage cash.
  • Understand business risk - both financial and non-financial, and know-how to mitigate those risks.
  • Know strategy and be able to see the big picture.
  • Be able to make decisions.
  • Understand people and be an effective communicator.
                                                                                 (Source and applied from Ben Paramore, Proformative)

What should CFO look like?
  • Be an effective organizational leader and a key member of senior management.
  • Balance the responsibilities of stewardship with a business partnership.
  • Act as the integrator and navigator for the organization.
  • Be an effective leader of the finance and accounting function.
  • Bring professional qualities to the role and the organization.
                                         (Source: The Role and Expectation of a CFO, IFAC (International Federation of Accountants)
  • Guardian of Resources
    • Protects its human, financial, and physical resources.
    • Minimizing the risk of destruction of facilities.
    • Handle with COSO standard and enterprise risk management.
    • Support audit issues.
    • Incorporate sustainable development.
  • Town Crier
    • Be an effective communicator to explain complex technical issues in simple and understandable terms.
    • Educate fellow administrators about the institution's financial condition and the benefits of good management practices.
  • Institutional Strategist
    • Drives the strategic planning process.
    • Prove the numbers.
    • First highlights significant financial challenges.
  • Sheriff
    • Ensure policies are followed and internal control.
    • Play the skeptic among senior administrators (i.e., ask the hard questions in the cabinet.)
  • Specific Duties
    • Treasury
    • Procurement / purchasing
    • Risk Management
    • IT
  • A web of Relationship
(Source: Lawrence R. Ladd, the Roler, Duties and Ethical Responsibilities of the Chief Financial Officer, National Association of college and university Business Officers.)

  • Be a master communicator
    • Articulate ideas to a range of audiences
    • Lead teams, build consensus, motivate people
    • Illuminate vision against the challenging
  • Be an adept translator
    • Translate numbers into meaningful information.
    • Relay key Leaning to all the operators within a business
  • Be a thoughtful strategist
    • Make a conscious effort to think strategically
    • View organization holistically
    • Embrace opportunities to work within other departments and business areas
    • Understand how the entire company work together 
  • Be a business generalist
    • Understand different operating units and understand how the finance function impacts them.
    • Seek opportunities beyond financial reporting and tax.
  • Be transparent
    • Lead by example by demonstrating integrity and ethics.
  • Be informed
    • ​​​​​​​Staying abreast of developments, regulatory and compliance requirements.
Source: parker + Lynch, the evolving role of the CFO.

   Financial Accounting  Managerial Accounting
 1. Users  External persons who make financial decisions.  Managers who plan for and control an organization.
 2. Time focus  Historical perspective  Future emphasis
 3. Verifiability versus relevance  Emphasis on verifiability  Focus on relevance for planning and control
 4. Precision versus timeliness  Emphasis on precision  Emphasis on timeliness
 5. Subject  Primary focus is on the whole organization  Focuses on segments of an organization
 6. GAAP  Must follow GAAP and prescribed formats  Need not follow GAAP or any prescribed  format
 7. Requirement  Mandatory for external reports  Not Mandatory

  • Management accounting is a profession that involves partnering in management decision making. Devising planning, and performance management systems, and providing expertise in financial reporting and control to assist management in the formulation and implementation of an organization's strategy. 
                                                                         (Source: Institute of Management Accountants (IMA) 2008, Statement on Management Accounting, Practice of management Accounting.)