The CFO is now firmly considered a strategic partner—dare we say influencer—in the C-suite. But there are still tactical accounting and finance functions to oversee.
Enter the chief accounting officer (CAO).
The CAO role has grown over recent decades. As of Sept. 1, more than 10,000 people globally held the title of CAO, a 60.4% increase from 1990 and a 36.9% increase from 2000, according to Live Data Technologies, which queries major search engines for employment data, monitoring job info for more than 88 million people at least twice monthly.
But what does the CAO really do?
CFO Brew spoke with CAOs about their responsibilities and how they support their CFO. They described the CFO-CAO relationship as “complementary” and said their work allows their finance chiefs to spend more time focusing on company strategy.
Supporting role. Jackson Healthcare, a group of healthcare staffing and technology companies, recently appointed five-year company veteran Patrick Russell as its CAO. In his new gig, Russell oversees the accounting, FP&A, treasury, and payroll functions. He also helps implement new technologies and conducts due diligence on investments and acquisitions.
“I feel like I’m doing the best I can for the company when I’m allowing Leslie [Kurtz, CFO] to have as much time [as possible] to be looking forward, looking and leaning into the future and into our strategy,” knowing that someone is keeping watch on the day-to-day finances, Russell told CFO Brew.
Erik Zhou joined corporate-spend platform Brex as its CAO in December 2018. His remit includes all of the company’s controllership, technical accounting, and financial reporting. Before Brex, Zhou worked for 11 years for PwC as an auditor.
Zhou said his background as an auditor at a Big Four accounting firm varies from the company’s CFO, Benjamin Gammell—who, by the way, has an interest in heli-skiing.
“When you’re in the CFO role, certainly the CFO role at Brex, [it’s] super strategic,” Zhou told CFO Brew. “You’re working with not just the financial reporting and the management reporting that we do in our team, but you’re working across the business and thinking about ways to grow the business.”
Zhou said the “complementary relationship” between the CFO and CAO at Brex started right away. Each person brought his own experiences to the table, and to be sure, their experiences varied.
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Gammell has a background in investment banking and operations. Conversely, Zhou cut his teeth auditing financial statements for large companies both public and private. He reviewed their technical accounting, their processes in place to meet SOX requirements, and their SEC filings.
“Because of my long time at PwC, and looking at financial reporting during the whole time as an auditor, that’s probably my personal bread and butter…skill set,” Zhou said.
That’s not unusual. The Live Data Technologies data shows that, from a sample of 10,000+ current CAOs, two in five came from a Big Four accounting firm, and one in ten has experience at a major bank. Nearly a quarter (23.5%) reported previous experience as a controller, 13.6% previously served as a VP of finance, and 12.6% workedas a CFO.
Team assist. Part of Russell’s job at Jackson Healthcare is to assist Kurtz when she’s tackling larger projects. For example, when Kurtz is looking over a contract, he may pitch in to review the financials. The work is based on each person’s “time and knowledge and expertise,” he said.
Russell also helps ensure the accuracy of financial information on potential investments to help company leaders make informed decisions.
“You’re giving that kind of feedback to the whole investment group that’s looking at the acquisition or the investment, to make sure everybody’s seeing the same thing…so that at the end of the day, the leadership group makes the right decision because they’ve got all of the relevant information they need,” Russell said.
Of course, the CAO remit is not identical at each company. Zhou said he’s added some more unique responsibilities. For instance, he manages the team that oversees company-wide back-office systems for things like governance and operations. He also hosts a Brex-sponsored podcast.
“My experience at Brex and being an early employee at Brex has driven my responsibility set to be a bit wider than a traditional CAO,” he said.
The CAO position is also a good career boost. A solid proportion of former CAOs advanced to become a CFO or another role in finance leadership, according to Live Data Technologies. A sample of 25,000+ former CAOs shows that 15.2% are currently CFOs and 12.6% are currently VPs of finance.