About CFOs
Chief Financial Officer, or CFO, is a title that covers different jobs. It can refer to the company treasurer or it can refer to the company controller. Sometimes the CFO supervises both of those positions. In any case, the CFO is a corporate executive who ranks in authority behind the Chairman of the Board, the Chief Executive Officer and the Chief Operating Officer.
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Duties of a CFO
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The Chief Financial Officer of a company is a corporate officer and member of the Board of Directors. He is responsible for managing all or part of the financial concerns of the company and reports to the CEO and the Chairman of the Board. In a public company, the CFO is responsible for financial reporting and may supervise the treasurer and controller.
Performing the Duties of a Treasurer
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The CFO in a public company may make decisions regarding the funding of the company. He decides when and how much money the company needs to meet its operating costs and fund any plans for expansion. He interfaces with investment bankers to raise money through stock or bond issues. He also is in charge of managing the company's investments, which include the operating fund and the pension fund. These are treasurer functions.
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Performing the Duties of a Controller
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In private companies, the CFO normally manages the tax and accounting functions, reporting to the CEO when funding is necessary to meet obligations. In smaller companies, the CFO rarely becomes involved in the company's funding activities because the CEO makes decisions on raising money from investors or through borrowings from banks and finance companies. In this case, the CFO is performing the duties of a controller.
CFO Compensation
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Average salaries for CFOs in small- and medium-size companies range from approximately $80,000 to $125,000, depending on experience and the type of industry. Some CFOs make considerably more, particularly if they are included in the company's bonus pool.
Sarbanes-Oxley
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Since Sarbanes-Oxley imposed strict standards of corporate governance and reporting, the position of CFO carries significant professional and personal liability, because the CFO must certify that the financial information the company reports to the SEC is correct and not misleading.
How to Become a CFO
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A degree in Accounting, plus experience, is generally the minimum requirement for a job as CFO. Since the Chief Financial Officer is a corporate officer, an MBA in Finance or Accounting is preferred. In companies that promote from within, positions that would qualify for consideration would be treasurer, controller or accounting manager, but CFOs are often brought in from outside the company, because they bring with them contacts that might be useful if the company needs funding or wants to expand.
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