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Do You Need a CPA On Your Finance Team?

August 04, 2022

Your current CFO is retiring. Do you need to refill the role with a CFO with a CPA or MBA? Most organizations think a CPA is a must……Is it?

The current employment market is one that we have not experienced in the past. Many baby boomers are planning to retire, and their succession plan needs to be well executed. The global pandemic has caused many to rethink the value of an experienced finance leader. Before finalizing the CFO position description, think about what technical skills and experience this person should have to do their job successfully. What are the benefits of a CPA versus an MBA in a finance role? We explore here.

CPA vs. MBA Requirements for a CFO:

The biggest difference between an MBA and a CPA is that an MBA is an academic degree, whereas a CPA is a credential that needs to remain active (extensive education, pass a four-part exam and meet experience requirements).

An MBA is a graduate degree that focuses on business leadership and management. MBA students learn to improve their critical thinking and strategic decision-making skills. An MBA from a highly regarded school is impressive and will always be considered an asset by an employer.

A CPA is a financial accreditation awarded by the American Institute of Certified Public Accountants and is viewed as a mark of achievement in the accounting industry. It is earned by fulfilling educational requirements along with passing a CPA exam. A CPA is an impressive designation, it will often come with a much higher salary requirement.

Key considerations

Organizations, both profit and non-profit, should consider the following before deciding which is needed:

Here are some factors to consider:

  1. The complexity of the position: The Chief Financial Officer's role is to oversee the organization's financial activities and team as well as support the CEO or Executive Director with strategic advice. Questions to consider…. is the company public? Does it operate internationally? Is it a large non-profit organization with a multitude of grants or a large endowment?
  2. Size of the organization: Does the organization have multiple locations? How many employees are in the organization? Are there plans for growth, an IPO, or consolidation?
  3. Industry experience: When comparing candidates, it is important to consider the amount of relevant experience they bring to the position. For example, it may not be worth the investment to hire a CPA with mainly tax accounting experience for a large healthcare organization. Rather, an MBA with 15 years of healthcare experience may be the better choice.

Key takeaways

From these points, we can gather that:

  • Companies value those with accredited accounting and financial reporting expertise, hence CPA CFOs.
  • Hiring CPA CFOs can be more expensive. Organizations in search of operational or general management skills may be able to successfully employ non-CPA CFOs.
  • Firms that have a strong controller with a CPA may not need their CFO to have a CPA.

In this market, the most important thing employers can do when drafting a position description is talk with their outside auditors. An attentive CPA firm will consult with their clients to help them decide if it is necessary to have a CFO with a CPA, MBA, or other education experience is needed.

Questions? We're here to help!

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