The chief financial officer (CFO) of a company or public agency is the corporate officer primarily responsible for managing the financial risks of the business or agency. This officer is also responsible for financial planning and record-keeping, as well as financial reporting to higher management. (In recent years, however, the role has expanded to encompass communicating financial performance and forecasts to the analyst community.) The title is equivalent to finance director, a common title in the United Kingdom. The CFO typically reports to the chief executive officer, and is frequently a member of the board of directors.

Qualifications

Many finance directors are professionally qualified accountants. It has, however, become commonplace for non-accountants to become CFOs in the United States. Indeed, many CFOs have an MBA but no qualified accountancy qualification such as CPA. This has been criticised in some quarters as a contributory factor to the wave of accounting scandals seen in the US. The Sarbanes-Oxley Act of 2002 aimed to address this by requiring at least one member of the company's Audit Committee to hold an accounting or finance qualification. The Act makes it likely, therefore, that the US business world will see a trend towards Chief Financial Officers possessing a US (CPA) or overseas accountancy qualification (e.g. ACA/ACCA/NIA National Insitute of AccountantsChartered Accountant).

CFO role in public agencies

Public agencies and government organizations throughout the world have financial directors and other leading officers responsible for financial management within their organizations. Many are equivalent in the scope of their responsibilities to CFOs.

United States

The United States federal government has seen a trend in recent years to incorporate more elements of business-sector practices in its management approaches, including the use of the CFO position (alongside, for example, an increased use of the CIO title within public agencies).

The Chief Financial Officers Act (or CFO Act) was signed into law by President George H.W. Bush in 1990.[http://govinfo.library.unt.edu/npr/library/misc/cfo.html Chief Financial Officers Act of 1990 ] For each of 23 federal agencies, the position of chief financial officer was created. Since that time, federal efforts have been intended to improve the government's financial management and develop standards of financial performance and disclosure.

The Office of Management and Budget (OMB) holds primary responsibility for financial management standardization and improvement. Within OMB, the Deputy Director for Management is the chief official responsible for financial management in the United States Government; the position was established by the CFO Act.