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From Accounting to Accountability
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Many years ago, the role of the chief financial officer (CFO) was to keep the inancial records, and had accounting, internal control, budgeting, and treasury responsibilities. but the role has changed over the years to be much more comprehensive and to include decision-making that extends beyond the accounting and treasury functions. the CFo of today is respon- sible for measuring and monitoring performance, but the CFo is also now involved in managing risk and creating value for owners.
What has caused this change? there is not just one cause; but rather several forces that have resulted in the expanded role of the CFo. in the 1990s, we saw the role expanded from financial accounting and accounting systems to include financial analysis and an active role in strategic planning.1 this expanding role is apparent in the Chief Financial officers act of 1990, which speciically addressed the changing role of the CFo in federal government entities.2 in the 1980s and 1990s, with the continued globalization and technological innovations, the CFo in some companies became a starring role as a deal-maker who sought out growth opportunities for the company.
the role of the CFo widened further because of the financial scandals of the 1990s and early 2000s that included enron, WorldCom, and, unfortunately, many more companies. the resultant changes in laws and regulations focused attention on the CFo and broadened the responsibilities of this position. this resulted in a renewed emphasis on the CFo’s role in accounting and inancial reporting, but also added responsibilities for restoring conidence in the integrity of the company’s inancial accounting, internal control systems, and risk management.
throughout this book, we discuss the responsibilities of the CFo in an organization. We recognize that in large companies the responsibilities of the CFo may be shared with the controller, a vice-president of inance, the corporate treasurer, a chief risk oficer, or some other, similarly titled indi- vidual. however, in referring to the CFo, we are referring to responsibili- ties of the inancial oficer with the ultimate responsibility for the inancial decision making of a company, responsibilities that may be shared or split among persons in the organization.
Frank J. Fabozzi - Personal Name
1st Edtion
978-0-470-09926-1
NONE
From Accounting to Accountability
Accounting
English
John Wiley & Sons, Inc
2008
USA
1-800
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