Chief accounting officers (CAOs) and financial controllers are both accounting experts who report to the chief financial officer (CFO)—but these two roles have subtle, nuanced differences. The controller oversees day-to-day accounting operations whereas the CAO is focused on tasks, such as corporate governance, risk management, and investor relations. The skill sets of chief accounting officers and controllers are complementary, as both ultimately work in tandem to support the CFO.
The CAO is the second-highest ranking finance professional in an organization, reporting to and working directly with the CFO. As the role of CFO has become more demanding, CAOs oversee the tactical and operational tasks that CFOs once dominated. Chief accounting officers are often tasked with SEC reporting, regulatory compliance, corporate governance, risk management, cost management, and environmental, social, and governance (ESG) reporting.
CAOs usually hold a degree in finance, accounting, or economics, and many hold a certified public accountant (CPA) license. This position requires a deep understanding of generally accepted accounting principles (GAAP), international financial reporting standards (IFRS), budgeting, financial planning and analysis (FP&A), cash-flow management, and treasury management. In addition, today’s CAO is expected to be more than just the head of accounting; they are expected to partner with the CFO.
A financial controller is, in essence, a company’s lead accountant. The controller is responsible for maintaining accurate books and reports and for running the day-to-day accounting operations of the business.
Controllers typically hold a certified public accountant (CPA) or MBA, and they are responsible for creating reports that provide insights into a company's financial standing, including accounts receivable, accounts payable, inventory, payroll, and invoicing. Controllers also manage the monthly, quarterly, and annual financial close process, ensuring the financial statements are produced in accordance with GAAP. Other important duties include tax accounting, management reporting, and variance analysis, as well as managing both internal and external audits.
Controllers typically report directly to the CFO (except in cases where there is a COA) and usually lead a team of accountants, bookkeepers, and accounts receivable/payable clerks.
In terms of duties and responsibilities, there is no practical difference between the two titles. The difference in titles is purely semantic. Comptrollers and controllers have the same position, but controllers work for businesses and comptrollers work for nonprofits and public sector organizations—often for local, state, and federal governments.
Both controllers and CAOs are accomplished leaders and experts in finance and accounting, but there are subtle contrasts that make these two roles complementary to one another.
|Scope of work||Strategic||Tactical and operational|
|Perspective||Forward looking||Day-to-day focused|
|Job function||C-suite business executive||Upper management|
Often holding a CPA, controllers are accounting experts whose skill set and knowledge base revolve primarily around GAAP, tax laws, and financial reporting. Compared to CAOs, controllers’ duties lie within a relatively narrow range. Similarly, CAOs are accounting experts, but the position demands versatility. A CAO may be found preparing an ESG report one week, assisting the CFO on budgeting the next week, and planning for an IPO the next.
The position of controller is inherently operational, focusing on maintaining records and reconciling accounts. The controller plays a very critical role inside an organization, but the duties themselves are mostly tactical. CAOs perform tactical tasks as well, but they also are expected to partner with the CFO on strategic tasks. CAOs often collaborate with CFOs to conduct “what-if” analysis for a variety of contingencies: new products, new business models, acquisitions, divestitures, international expansion, supply chain issues, economic downturns, and a host of others.
Controllers spend a sizable portion of their time gathering data to report on current and past results—everything from cost-volume-profit analysis to balancing the books. The controller’s main focus is the daily management of the company’s financial records and accounting. CAOs, on the other hand, simultaneously keep an eye on the past, present, and future. Like the controller, CAOs need to know the numbers inside and out, but CAOs are watching out for potential threats and opportunities that will impact the business. This is most clearly reflected in the CAO’s role in ESG reporting and risk management.
The roles of both the controller and CAO are senior leadership positions, however, as the title implies, the CAO is a business executive and a C-suite officer. The controller has leadership responsibility for managing the accounting staff, but the CFO and CAO ultimately set the tone as copilots of the finance department. The controller then translates that vision into day-to-day managerial action.