Financial Controller

Internal controls are the structure of information management, as well as the decisions and planning
that ensure an organization’s activities are done in support of its objectives. Internal financial
controls specifically refer to the controls in place that maintain financial compliance with regard to
both budget and regulatory oversight. The term internal financial controls refers collectively to the
policies and systems designed to ensure that risk is managed, regulatory oversight responsibilities
are complied with, financial goals are targeted and budgets are met.

Comptroller or financial controller is the designation held by the person most administratively in
charge of daily accounting operations and oversight. Controllers work for corporations, governments
and other organizations that function at a level of financial complexity or growth that exceeds the
capacity of basic accounting or bookkeeping.

Financial controller is the title held by the financial manager in a private business or publicly traded
company. Financial control officer (FCO) is used to designate an executive position, while
functionally having the same responsibilities as a financial controller. Comptrolleris the title more
commonly used to designate these positions within government. Other job titles typically held by
professionals who work as financial controllers include treasurer and finance director.

Financial controls are part of both for-profit and non-profit organizations, although the reporting
obligations of controllers will differ based on the registration type and structure of the company.
Smaller businesses administer the bulk of their financial responsibilities internally through
accountants, and use a controller as a consultant to oversee procedures, develop policy or
recommend systems.

Specific tasks performed by financial controllers

Legislation exists that requires the external and internal auditing of publically traded companies to
protect consumers and investors against fraud and error. A company’s financial controller is
responsible for overseeing the completion of internal control audits and facilitating changes to the
controls when error, or the potential for error or fraud is identified. The controller also manages fiscal
operations and has responsibilities that include:

 Monitoring and controlling cash flow

 Developing and maintaining a company’s financial policies and procedures
 Creating and completing financial reporting systems (daily/weekly/monthly/quarterly/annual)
 Selection and maintenance of financial software
 Overseeing payroll and accounts receivable and payable
 Completing audits and financial compliance activities
 Monitoring debt/credit
 Overseeing payroll and benefits
 Reporting to the SEC (for publicly traded companies)
 Managing any outsourced financial activities
Financial Controllers In the News and Trending
Finance has held a challenging position in news cycles of late while the fall-out from economic
recession continues to be felt. Concerns in both the legislative and consumer arenas have prompted
calls for increased oversight and accountability, particularly in larger companies that hold the
potential for powerful financial influence. Enter the position of financial controller far more heavily
into the public discourse.

While public sector comptrollers become more heavily scrutinized as tax revenues slim, private
sector controllers are finding their obligations to auditing and reporting are increasingly more
important. The Wall Street Journal’s daily blog Corruption Currents is peppered with entries that cite
the increased expectations placed on controllers to implement auditing and reporting policies that
ensure financial accuracy. As business seeks to reduce increased legislation and government
oversight with regard to internal management strategies, many companies are looking to their
controllers as the professionals who can prove a company’s integrity.

Comptrollers in The Public Sector

All municipalities, states and most federal service bodies retain financial comptrollers as a means to
ensure accountability to the taxpayers that fund the agencies. The Office of the Comptroller General
and the Government Accountability Office oversee government spending on the federal level.
Credentials for public sector comptrollers are comparable to those in the private sector.
Responsibilities for a government comptroller are also similar to those in the private sector as they
relate to daily financial operations, but with the added responsibility of public reporting for tax
accountability.

FCO vs. CFO – Tactics vs. Strategy

The financial control officer is concerned with accounting. The chief financial officer is concerned
with finance. The difference between accounting and finance is the difference between tactics and
strategy. A financial control officer is responsible for the management of a company’s near term
fiscal operations – those activities that ensure the support of daily operations and solvency.

A chief financial officer is responsible for the company’s long-term financial growth –those activities
that carry risk and balance debt with equity. While a CFO may have all the responsibilities of a
controller, a controller is seldom responsible for strategic decisions and the development of budgets.

A company may decide to have both posts held by one individual. This is not uncommon in smaller
businesses, or businesses making transitions in size and revenue that need to simultaneously
cultivate growth while maintaining caps on cost. This individual will be qualified in terms of
education, certification as a controller while being tasked with strategic responsibilities as Chief
Financial Officer.

Degrees and Standard Certification Held by Financial Controllers

Most companies will require their controllers to have a bachelor’s degree in accounting, and often
retain CPAs or certified managerial accountants (CMAs).

Becoming a CPA: A certified public accountant completes a bachelor’s degree in accounting then
applies to take the Uniform Certified Public Accountant Examination, developed by the American
Institute of Certified Public Accountants (AICPA). Once the exam is passed, one year of work
experience is required. At the conclusion of the work experience, a candidate is eligible to apply for a
state issued CPA license.

Becoming a CMA: A certified management accountant is an accountant who holds a credential

issued by the Institute of Management Accountants. To attain the credential, a candidate must hold
a bachelor’s degree in accountancy from an accredited university, complete a two-year professional
experience, and pass the IMA’s examination. Unlike the CPA designation, the CMA credential is not
a license and is not overseen by jurisdictional licensing bodies.

Both CPA’s and CMA’s are required to pursue a rigorous course of continuing education in order to
maintain their credentials. Financial legislation changes frequently and ongoing commitment to
staying current is essential.

MBA and MACC

Organizations with finances complex enough to warrant a controller or executive FCO retain CPAs
and managerial accountants with the proper education and experience in accounting and financial
management, and these aren’t necessarily always graduate degree holders. Professionals with
MBAs who have made the transition from controllers to executive positions as FCOs might find their
MBA helped them make the leap, although there are many successful corporate FCOs without
MBAs.

Alternatively, an MACC (Master of Accounting) differs from an MBA in terms of orientation and
detail. While an MBA will teach a candidate business strategy, management, human resources,
business technology and communication, an MACC focuses more on hard accounting and financial
management. Selecting the degree comes down to circumstance – a controller looking to move up in
an organization or explore opportunities in more strategic positions should look to the industry to
determine which credentials are most relevant.

Specialty Certification for the Financial Controller

While financial controller functions are considered a specialty area in the field of accounting,
controllers themselves may choose areas of emphasis that best serve organizations within specific
industries. While a financial controller most likely holds a CPA or CMA, there are additional
credentials offered through other financial and accounting agencies that a controller may pursue as
part of personal professional growth or corporate support.

Certified Internal Auditor: Due to the imperative of compliance in government and publicly traded
companies, certification in auditing may serve a controller well. This certification is issued by the
Institute of Internal Auditors (IIA) and requires a bachelor’s degree, personal references, work
experience and passing the IIA’s examination.
Certified Government Financial Manager: Comptrollers in the public sector may choose to become
experts in the unique financial challenges of government fund accountancy by obtaining this
certificate. Developed by the Association of Government Accountants, requirements for this
certification include a bachelor’s degree, work experience, passing an examination, and formal
declaration to abide by the AGA’s code of ethics.

Chartered Financial Analyst: In companies where investments and the use of financial instruments
are integral to operations, a controller may choose to complete the requirements for this designation.
Sponsored by the Association for Investment Management and Research (AIMR), the candidate
must have investment-related experience, be an AIMR member, hold a bachelor’s degree in a
financial field, and formally declare his or her willingness to abide by the organizations code of
ethics.

Continuing Education, Organizations and Networking

While controllers who hold CMA or CPA credentials are required to pursue ongoing education as
part of their renewal process, even finance control professionals who work without these
certifications will find that staying current in industry trends is essential to growth; both their own and
their company’s.

Organizations that certify and credential finance professionals often offer courses, sponsor
conferences or give workshops. Universities that issue degrees in accounting and business often
host seminars and education programs. Whether attending for credit towards renewal of a license or
as a means to learn the impact of the most recent legislative changes, participating in these events
acknowledges that finance does not happen in a vacuum.

Additionally, joining professional organizations such as the American Institute of Certified Public
Accountants, the American Accounting Association, the Institute of Management Accountants, gives
access to continuing professional education opportunities through publications, newsletters, forums
and networking. Continuing education and connecting with other financial experts and industry
leaders is vital to ensuring that financial controllers stay current with laws, fiscal strategies, market
trends, technology, information management and global economics.