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FM14 Chap1 Intro To Controllership
FM14 Chap1 Intro To Controllership
FM14 Chap1 Intro To Controllership
V. LESSON CONTENT
Controllership is the practice of the established science of control which is the process by
which management assures itself that the resources are procured and utilized according to plans in
order to achieve the company’s objectives.
Financial Controllership is a management function that supervises the accounting and financial
reporting of an organization. It is responsible in the implementation and monitoring of internal
controls. Most simply, the financial controller is a company’s lead accountant. They oversee
accounting activities and ensure that ledgers accurately reflect money coming in and out of the
company. Note: This role is also sometimes known as the “comptroller”.
The importance of this function within a company has increased considerably over the years.
This professional participates in the decision-making process and also performs the analysis,
interpretation and collection of information to monitor daily activities. In short, a controller is
responsible for the information system and internal control. He or she creates tools to assist in
the planning, execution and control of the organization's activities.
“In accordance with Section 185, Fair Use of Copyrighted Work of Republic Act 8293, the copyrighted works included in this material may be reproduced for educational purposes
only and not for commercial distribution,”
NVSU-FR-ICD-05-00 (081220) Page 1 of 5
Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.: IM-FM14-2S-2023-2024
The CFO or Chief Financial Officer is the senior executive responsible for managing the financial
affairs of a company.
The CFO’s primary responsibilities include developing and implementing financial strategies,
overseeing financial planning and reporting, and managing the company’s investment activities. The
CFO is also typically responsible for managing the company’s treasury function, overseeing tax
compliance and risk management.
As a member of the senior management team, the CFO reports directly to the CEO.
Financial controller is a senior financial officer who supervises the financial department of a company
and is responsible for its financial accuracy, performance, and compliance.
The financial controller position is typically found in larger organizations and reports directly to the
CFO.
Financial controllers are responsible for the day-to-day management of the finance department and
may also be involved in strategic planning, forecasting, and budgeting. They ensure that the
organization’s financial statements are accurate and comply with applicable laws and regulations.
Financial controllers also develop and implement policies and procedures to safeguard the
organization’s assets and minimize risk. They often work closely with auditors to ensure that the
organization’s financial statements are free of material misstatements.
“In accordance with Section 185, Fair Use of Copyrighted Work of Republic Act 8293, the copyrighted works included in this material may be reproduced for educational purposes
only and not for commercial distribution,”
NVSU-FR-ICD-05-00 (081220) Page 2 of 5
Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.: IM-FM14-2S-2023-2024
Accounting vs. finance: Controllers are experts in accounting who must stay current on Generally
Accepted Accounting Principles (GAAP) and tax rules. They are highly technical and precise.
Controllers are almost always CPAs or hold similar professional licenses, whereas CFOs operate in
the broader discipline of finance, such as financial planning, capital markets and investing. While
CFOs need to understand accounting — the language of business — they don’t necessarily need to
be CPAs. CFOs hail from a variety of backgrounds, from investment banking to managing a line of
business.
Tactical vs. strategic: Controllers are tactical operators, adhering to procedures and deadlines and
focused on accuracy. Their duties can be described as finite, such as running weekly payroll or the
monthly accounting close process. CFOs have a longer line of sight, working on more strategic issues
that affect where the company is headed. They advise CEOs and other executives on how to keep
the company economically healthy and how growth might happen in the short, medium and long
terms.
Heads-down vs. heads-up: Controllers spend most of their time in a “heads-down” position — that
is, working to keep ledgers accurate and accounting systems working smoothly, analyzing variances
and balancing debits and credits. The focus is mostly on historical data and ensuring results are
accurately reflected. It’s an essential role, guaranteeing that data and reporting remain accurate for
decision-makers.
In contrast, CFOs take a “heads-up” posture: scanning markets, economic forecasts and the
competitive landscape for opportunities and threats. They also identify areas of inefficiency, make
recommendations and develop action plans. In addition, CFOs generate forecasts and run scenario
analyses, so the company can be predictive and proactive for the future.
Internal controls vs. market trends: Controllers are responsible for developing, disseminating and
monitoring the internal controls that safeguard a company’s assets and prevent and detect errors and
fraud. As a result, they are ingrained in internal processes and workflow. While CFOs, especially
those in public companies, must attest to the adequacy of those internal controls — and thus must
have full confidence in their controllers — they spend more of their time looking externally; CFOs
investigate partnerships, investment opportunities and acquisitions.
“In accordance with Section 185, Fair Use of Copyrighted Work of Republic Act 8293, the copyrighted works included in this material may be reproduced for educational purposes
only and not for commercial distribution,”
NVSU-FR-ICD-05-00 (081220) Page 3 of 5
Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
IM No.: IM-FM14-2S-2023-2024
Executing tone vs. setting tone: The controller and CFO are both responsible for managing finance
staff. The controller has direct responsibility for the accounting team and, in turn, reports to the CFO,
who directly or indirectly manages the rest of the financial staff. The CFO sets the tone for the entire
financial team and shapes its culture. The controller translates that vision into day-to-day
management of direct reports.
Face of accounting vs. face of the company: Controllers are the face of the accounting function to
all the other department managers in the company. They collaborate within the company to educate
and enforce accounting policies. The CFO is the face of the company to outside parties. Examples of
a CFO’s tasks include leading quarterly earnings conference calls and liaising with banks or large
suppliers.
The controller is intricately involved in the company accounting process. And in many
cases, they will do a lot of accounting day to day. But in larger finance teams, there’s a clear
distinction between the two.
Accounting is the act of recording the company’s transaction data. This includes
money coming both in and out of the business. Thus, accountants are primarily concerned with
recording figures accurately and as smoothly as possible. Obviously, this is overly simplistic, but
that’s the concept in a nutshell.
Controlling is more concerned with ensuring that recorded data is accurate, on time, and
within the rules set by the company. When there’s a discrepancy in the books, the controllers should
spot it, figure out what happened, and follow up with the parties involved. They’re also typically in
charge of policies and procedures to ensure that the right transactions are made by employees. The
most obvious example is expenses - the financial controller is typically tasked with creating an
expense policy and holding team members accountable to it.
1. Cite a company that employs a financial controller and explain the roles of a financial controller
in that company.
VII. ASSIGNMENT
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