Career Comparison: Chief Accounting Officer vs. Controller

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Few aspects of an organization are as important as its strategic financial planning and day-to-day financial management. The former is the province of the chief accounting officer (CAO), while the ongoing accounting and compliance responsibilities are managed by the company’s controller. The two positions complement each other and serve as a vital bridge between the top executives and finance departments.

Finance managers looking to advance in their careers will find striking differences in the duties and areas of focus for the CAO and controller positions. While there is considerable overlap in the skills and education of chief accounting officers and controllers, the two roles have different career paths, compensation, and scope of responsibilities.

CAO and controller roles are similar in that both job categories require education, training, experience, and often certification in accounting. The job duties of controllers and CAOs remain closely tied to the accounting function, and a primary responsibility of both positions is to ensure all financial, accounting, and tax systems are in regulatory compliance. Both positions also report to the chief financial officer (CFO). In most other ways, the two corporate roles are dissimilar, though equally important.

However, the two important financial positions are distinguished by their many differences rather than the similarities mentioned above. For finance professionals looking to the future and considering chief accounting officer vs. controller jobs, the unique aspects of the two roles can help determine which position is best suited to their talents, abilities, and interests.

Duties and Responsibilities

The principal duty CAOs and controllers share is responsibility for keeping the company financially healthy. CAOs ensure the company’s financial systems comply with all government regulations. Theirs is an officer-level position in the corporation that plays a key role in devising the company’s long-range strategic financial planning. CAOs oversee the organization’s ledger and financial accounts, cost controls, and other reporting and auditing functions. They work closely with the CFO to report on financial operations and to analyze the impact important business decisions will have on the company’s finances. For example, a shift to cloud computing would impact facilities costs should the company be stuck with long-term leases for buildings housing the in-house computer systems the change will render obsolete.

While strategic financial planning is a CAO’s primary responsibility, other important matters are typically handled by the CAO as well:

  • Prepare quarterly financial reports and other SEC documents
  • Ensure that general ledger accounting complies with generally accepted accounting principles (GAAP) best practices
  • Manage capital assets, including tax planning and compliance

By contrast, controllers closely monitor the day-to-day financial operations of the company. They are the company’s official record keeper. Controllers are often responsible for hiring and training employees in finance departments. A controller’s duties include ensuring the company meets all tax, permit, and license requirements. Controllers are responsible for assisting external auditors in confirming compliance with applicable financial standards and practices. For publicly traded firms, controllers may handle all public financial filings.

Controllers have their fingers on the pulse of the company’s financial health. Other typical duties of a controller include the following:

  • Thorough knowledge of all company accounting procedures
  • Management of payrolls and weekly job reports
  • Cash management and maintenance of bank account balances

How CAO and Controller Positions Differ from the Chief Financial Officer

The CAO’s role is much narrower than that of the CFO, who is charged with managing the financial aspects of all company operations, including forecasting and strategy, budgets, credit management, tax planning, and insurance. The CAO has the primary responsibility for ensuring the timeliness and accuracy of accounting functions while assisting the CFO’s financial planning and strategy.

Similarly, the skills and knowledge required by the CFO position are much broader than the requirements for the controller role. In particular, CFOs need a thorough understanding of business processes and how the company’s financial systems fit into its diverse operations. CFOs must understand business risk, funding, and capital structures to a much greater extent than controllers, whose focus is restricted for the most part to accounting, record keeping, and financial reporting.

Skills

To qualify for a CAO position, a candidate generally requires at least five years of experience serving in a senior financial management job, as well as practical experience with financial management and accounting in a business or organizational setting. In addition, CAOs should be well versed in tax law and in business-management software such as SAP and Salesforce. Most importantly, a CAO needs a solid business sense about the company’s goals and strategies, as well as an overall awareness of markets and innovations that will impact those areas.

The skills required of controllers revolve around the day-to-day financial management of the organization, including bookkeeping, regulatory compliance, licensing, cash accounting, and budget management (though budgeting itself may be the responsibility of individual business departments with the assistance of the controller). First-rate accounting and financial skills top the list of the requirements for the controller position, though interpersonal skills are also important for the many controllers who are charged with recruiting, hiring, training, and managing personnel in accounting and financial departments.

What Soft Skills Are Critical for Success in CAO and Controller Careers?

As far as the roles of chief accounting officer vs. controller, the two are further distinguished by the soft skills each management position requires. Soft skills are often referred to as “people skills.” For example, CAOs are much more involved with strategic planning, primarily by working closely with the CFO and less so with other C-level executives. While controllers also have close ties to the CFO, the controller’s tasks are much more tactical than strategic and involve management of daily financial functions and compliance rather than long-term planning and goal setting.

However, controllers aren’t just accurate bookkeepers. They must also effectively manage staff.

  • Controllers usually work directly with employees in the accounting and financial departments, whereas CAOs rarely take a hands-on role with personnel management.
  • Both the CAO and controller roles require excellent communication skills, though CAOs communicate more often with senior executives and officials, while controllers deal much more often with line staff.
  • In both situations, leadership skills are highly prized, as are technical acumen and accounting expertise.

Education Requirements

CAOs and controllers typically hold at least a bachelor’s degree in accounting, finance, economics, or business management, as well as a Certified Public Accountant (CPA) certificate, which is a requirement for anyone filing corporate financial documents with the Securities and Exchange Commission. Many companies prefer CAO and controller candidates to have earned a master’s in business administration (MBA) degree or other advanced degree in accounting, finance, economics, or business administration with an emphasis on accounting.

In addition to a CPA license issued by a state Board of Accountancy, other certifications available to prospective CAOs and controllers include Certified Management Accountant (CMA) from the Institute of Management Accountants, Certified Internal Auditor (CIA) from the Institute of Internal Auditors, and Certified Information Systems Auditor (CISA) from ISACA (formerly the Information Systems Audit and Control Association).

Job Outlook

The U.S. Bureau of Labor Statistics (BLS) Occupational Outlook Handbook projects that employment of accountants and auditors will increase by 10% between 2016 and 2026, which is greater than the 7% job growth predicted for all occupations. The job prospects of finance managers, the broad BLS category under which controllers fall, is even more promising, with demand expected to increase by 19% between 2016 and 2026.

Job opportunities for top executives, which include CAOs, are forecast to grow by 8% from 2016 to 2026, according to the BLS, although the growth rate is slightly higher at 9% for general and operations managers, many of whom would likely work under the guidance of the CAO.

Potential Salaries

The BLS reports the median salary for finance managers, which includes controllers, was $127,990 as of May 2018. The highest salaries were paid by professional, scientific, and technical services firms ($151,610) and the lowest by government agencies ($112,830). For top executives, the BLS category under which CAOs fall, the median annual salary as of May 2018 was $104,980.

The CAOs self-reporting their salaries to PayScale earn an average of $158,996 annually in a range from $70,800 for the lowest paid 10% to $253,075 for the highest paid 10%. The salaries reported by corporate controllers to PayScale average $95,586 annually, and for financial controllers, the average annual salary reported to PayScale is $81,150.

Two Unique Roles with Common Financial Interests

Whether you aspire to contribute to an organization’s strategic financial planning as a chief accounting officer or prefer the hands-on, day-to-day financial management responsibilities of a controller, the best way to prepare is by earning an advanced degree such as Ohio University’s online Master of Business Administration. The online MBA degree improves your potential value as a leader in financial management. It also helps you take full advantage of future business opportunities.

When it comes to a chief accounting officer vs. a controller, it’s clear that both positions are important to a company’s success. The financial health of the organization is in the hands of the controller in the short term, while the chief accounting officer plays a pivotal role in the longer view of the company’s financial operations. The two positions complement each other and serve as the key link between the executive suites and the accounting ledgers on the financial ground floors.

Recommended Reading

Ohio University, A Tale of Two Advanced Degrees: Master’s in Finance vs. MBA

Ohio University, MBA Careers at a Glance: What Is Corporate Finance?

Ohio University, MBA Programs: What Is Business Process Management?

Sources

Accounting Now, Chief Accounting Officer

Accounting Solutions Partners, “The Differences Between a CFO, Controller, and Accountant”

Business Insider, “The Difference Between a CFO and a Controller

Government Finance Officers Association, Chief Accounting Officer

Inc., “Why Your Controller Isn’t a CFO

Institute of Internal Auditors, Certified Internal Auditor

Institute of Management Accountants, Certified Management Accountant Certification

Investopedia, “Controller”

Investopedia, “Controller: Career Path and Qualifications”

Investopedia, “Generally Accepted Accounting Principles (GAAP)”

ISACA, Certified Information Systems Auditor

Journal of Accountancy, “Controller to CFO: Not a Straight, Simple Path”

PayScale, Average Chief Accounting Officer (CAO) Salary

PayScale, Average Financial Controller Salary

The Strategic CFO, “Controller vs. CFO”

U.S. Bureau of Labor Statistics Occupational Outlook Handbook, Accountants and Auditors

U.S. Bureau of Labor Statistics Occupational Outlook Handbook, Financial Managers

U.S. Bureau of Labor Statistics Occupational Outlook Handbook, Top Executives

Wall Street Journal, “Accounting Chiefs Rarely Promoted to CFO Role”