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.
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.