Value Proposition

The labor market for finance and accounting professionals is tight — especially for CPAs. Here’s why your company should insist on hiring CPAs for key finance and leadership positions.

June 2007
from Journal of Accountancy

It’s no secret that CPAs are in short supply. Accounting firms — long known as the incubator for highly skilled CPAs — cited staffing as their number one concern in 2006. That means CPAs will command higher salaries and will be harder to find than other finance professionals. But many don’t realize the tremendous value CPAs bring to a company that extends well beyond their unparalleled knowledge of GAAP.

As an executive in industry, you know all too well the dual challenge of maintaining your company’s high standard for financial integrity while also controlling costs. The same analysts who criticize companies for corporate governance and accounting problems are even quicker to criticize a company that has “excessive” overhead, especially those in back office tasks like finance and accounting.

This article explains the benefits of hiring CPAs and offers points you can use in explaining to your CEO and others, including analysts, why you should require CPAs to fill more of your key finance positions.


The following characteristics help distinguish CPAs from other professionals.

Consistency. Consistency is a key asset CPAs bring to the job. “CPAs have a fixed set of credentials that are reliable across all state lines,” says K. Michael Conaway, CPA, a Republican member of Congress from the 11th District of Texas. Conaway, who has also served on the Texas State Board of Accountancy, notes that “CPAs have all passed the same exam and met experience and education requirements. That sets them apart from a general consultant or someone else with no specific credentials.”

By contrast, MBAs, for example, may have concentrated in disciplines outside of accounting or finance.

Finance Proficiency. Colleges teach and test one topic at a time, and often employees are not exposed to certain financial concepts until they are promoted or move into a new department. By the time you find out that an employee is in over his head, it might be too late.

“I feel that the CPA is more valuable than my J.D. degree,” says Scott N. Flanders, CPA, president and chief executive officer of Freedom Communications Inc., a privately owned media company in Irvine, Calif. “A lawyer may not have knowledge of business, but the CPA credential connotes more financial savvy than a degree from the best schools.”

Finally, given their training and the range of experience they typically gain early in their careers, “in a few years an effective CPA experiences more issues than a general manager might experience in 10,” says Dick Norwalk, CPA, chief operating officer of G.L. Homes, a Florida homebuilder that has a number of CPAs on its senior management team.

Technical Skill. A prospective employee’s understanding of GAAP cannot be accepted based merely on a resume showing an “appropriate” combination of education and experience. When it comes to knowledge of and training in GAAP, the CPA is the gold standard. CPAs have the technical knowledge that companies need to meet current compliance requirements and accomplish other strategic goals. In the wake of the Enron collapse and other corporate scandals, “companies are highly focused on ensuring that accounting standards are followed and that their internal control systems will be deemed robust, withstand scrutiny under Sarbanes-Oxley, and keep the company out of the headlines for malfeasance,” says Linda Bergen, CPA, a vice president in Citigroup’s Corporate Accounting Policy Department. Among other things, CPAs “understand the value of having good internal control systems, which would help avoid misappropriation of the company’s assets and errors in financial reporting. Only CPAs are likely to have an in-depth knowledge of generally accepted accounting principles.”

Strategic Analysis. Beyond compliance concerns, accounting skills are an asset in management decisions. “A CPA is likely to have more in-depth knowledge of the numbers and what they indicate about the business’ performance,” says Bergen. “CPAs are better equipped to analyze the financial aspects of the business challenge or opportunity. They care about the details, and it is often in the details that deals are made or broken. The big picture perspective is not enough.” CPAs can provide the skills that bring the big picture into focus, however. “Our CPA background enables each of us to put structure around an inherently unstructured business,” says Norwalk, of G.L. Homes. “That structure — systems to manage approvals, develop new product, manage financial systems, and manage a group of 30 subcontractors who need to work together to create a finished project — has been responsible for much of our success.”

And companies should be aware that CPAs can be an asset in many areas within an organization. “In the post-Enron era, the days of a general counsel being able to say that finance and accounting matters are the responsibility of the CFO are gone,” says Frank L. Fernandez, CPA, executive vice president, secretary and general counsel of Home Depot Inc. “Finance is the common language in corporate America. Most of the significant corporate scandals over the past five years have involved accounting and financial transparency issues. You can’t be a general counsel and not understand your company’s financial statements and significant accounting policies.”

Ethics and Licensure. Although there are other financial and accounting credentials, the CPA is not just a credential. It is a license. CPAs must demonstrate an understanding of professional ethics standards. They are bound to a code of professional conduct and are subject to discipline by both their state board of accountancy and the AICPA for ethics violations. Many companies now train their employees in ethics, but CPAs already have undergone extensive ethics training.

In Practice

The Walt Disney Co. recently established a CPA as an informal requirement for certain jobs within the corporate finance function, according to Brent Woodford, senior vice president, planning and control. “We created an informal policy that said that jobs that involve accounting judgment or technical accounting skills require a CPA. We wanted to have the CPA as a baseline for these key jobs.”

The policy applies to all business unit controllers and their direct reports, all leadership jobs in the control and accounting functions, and managers in accounting areas in which judgment is required, Woodford says. As a specific example, “in our business, we are required to have a return reserve for the DVDs that we ship,” he notes. “Whoever makes that judgment should have a CPA background.” The company felt that CPA expertise would best qualify the person for this and other key positions.

Before the hiring guidelines were in place, Woodford believes that managers might still have chosen CPAs for these positions, and they continue to be allowed some latitude in their choices. “But now, if they are not hiring a CPA, we want to have a conversation with them about why not.”

Building for the Future

The current environment is one of constant variation, says Norwalk. “Strategies that won yesterday’s battle may not be relevant in today’s fight,” he says. “A company may need to react to commodity price swings, new environmental challenges, globalization, a category-killing competitor entering its space, a new generation of employees, a hurricane, a public relations disaster or a host of other issues. Breadth of experience gives a CPA the ability to understand the varied dimensions of these issues.”

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Nicholas J. Mastracchio Jr., CPA, Ph.D., is a member of the board of examiners for the Uniform CPA Exam. He also is a member of the faculty of the University of South Florida. His views as expressed in this article do not necessarily reflect the views of the AICPA or the Journal of Accountancy.