MBA Or CPA Best Route To CFO Or Controller Job?

There is a blog post on this topic in every finance forum, including an excellent discussion started by Cindy Kraft on Proformative - with lots of comments, etc.

There are some standard technical skills for someone to be a CFO - regardless of the path taken - those most be accomplished to handle the requirements of the CFO role.

As for whether which degree or certification, I've seen excellent CFOs from both routes because the companies had different needs and while has they each had the CFO title, their roles inside their respective company are very different.

The one answer is "A company will define what it needs" - I know that sounds trite, but it's not intended to be. It's simply a reflection that every company has needs driven by their board, CEO, strategic plan, pricing, level of complexity in accounting, etc. I will say the within similar companies, there is a tendency to hire similar profiles for the CFO.

I remember the focus for anyone seeking to be a CFO is to look at people who hold the role you seek (industry, company size, company ownership, etc.), that will be a good starting place.

Lastly, remember to focus on your own strengths - I happen to be a CFO from the MBA side, because while I appreciate accounting and have done my fair share, it's still not my strongest skill set within finance. My election for an MBA was to take advantage of where I was strong in skills and interest.

I have an MBA which gave me many tools to handle a variety of ever-changing challenges. However, what I have found is, especially post-SOX, the controller in a public company is expected to have a CPA and often specific big four experience. A CFO with such a controller may not need to have the certification. But I agree with the notion that if you can get both early in your career, that's the best route to full employment.

Let's forget about public companies. I should have been more specific. My collegue and I are only talking about private companies. How do you think that changes the dynamic? It may be hard to believe for some but not everyone has the desire to work at a public company.

As an MBA with 25+ years in private companies, I realize I am not impartial on this subject... Every controller I have worked with has been a CPA, but not all the CFO's have been CPA's. My experience with controllers I've worked with is that they are hyper-focused on transactional aspects of the business and less focused on the strategic aspects like growth, innovation, leverage. I agree that 2 different skills sets are presented, so choice is dependent on what skills the company requires.

Credentials are mostly about changing jobs and moving up in a company or division when people don't know you. Once you are there it is about getting along with others and doing a good job rather than whatever credentials you may have on the resume. A good personality is worth at least one certificate or two in practice. I find from experience when it comes to credentials one favor's one over the other based on their experience and personal background. Audit types weigh the CPA over the MBA and general financial executives the MBA. I've also seen some people use it as an excuse for passing over someone when clearly it has nothing to do with the job. My advice is go for more education whenever you can and pursue what you are comfortable with because in the end that's what will show up in your work product.

If someone needs to go through one of those on-line employment or HR portals, it seems like a lot of times they won't even get into the eligible pool without a CPA, but that is not necessarily the case if they don't have an MBA.

"There is a blog post on this topic in every finance forum, including an excellent discussion started by Cindy Kraft on Proformative - with lots of comments, etc." Thanks for the mention, Mark Richards!

You've really summed up the "right" answer with this comment, Mark ... "A company will define what it needs". I would just add ... or wants! It is why I believe it is SO CRITICALLY IMPORTANT to understand WHAT your value is and WHO needs it. Otherwise, the job hunt is even more frustrating than it has to be.

But to your point, Dan, the MBA is probably -generally- more valuable in the private sector. At least, that's the trend I'm noticing.

I have found very effective CFOs that have neither a CPA nor MBA.

FEI SF recently had retained recruiters from Russell Reynolds and Spencer Stuart spark on what employers are looking for today in a CFO. Financial planning was the top skill being sought as companies need to look forward and develop scenarios in these uncertain times. CPA is not needed and in fact Controller skills are less sought after in this post SOX implementation era. Experience is most important vs degrees.

Many employers may seek a controller and require a CPA certification...often influenced by a friend, colleague, or even a recruiter. So you must have CPA certification to compete for such position with the company. In certain instances, likewise, an employer may believe that they "require" an MBA and nothing else will suffice. The irony is that an MBA from, say, Left Wheel, Mississippi is not the same as an MBA from CAL. Okay, let's look at the situation from your perspective. Are you seeking an accounting career and would you like to become a corporate controller (typically the company's de facto chief accounting officer), then gaining your CPA certification is an absolute must do. If you are seeking a career in financial planning and budgeting, mergers and acquisitions, consulting or to become a CFO in most companies, then the academic content learned getting an MBA from a good school will be more valuable. There is no right answer...only answers that best fit your goals and aspirations.

I believe that the financial community has taken a bullish approach to the CPA designation and its application to every area of business. Passing a license doesn't make you a financial expert. I have met so many CPA's that have passed their license's and they were CLUELESS. I have found out in my years experience that CPA's are impressed by other CPA's.

I believe that experience and the willingness to get it and apply it counts first. CPA/CMA/CFA/MBA are all great and believe that the help alot, but they are just the icing on the cake. Running a company and learning about all of the industry niches takes time. A company has to be willing to hire you and show you the ropes before you aspire for the grand title of CFO.

I think the biggest advantage of having a CPA certificate is during a job search. It seems that so many HR folks hang their hat on this. CPA's will usually have a good handle on financial controls, GAAP and now SOX. Although important, in my experience, this is only a part of the CFO's responsibilities. A good Controller should be able to provide the organization those skills.

More importantly, the CFO must be adept at budgeting, strategic analysis and planning, risk management, balance sheet management and especially resource allocation. For this reason, I think an MBA gives a more rounded framework to prepare someone to become a CFO.

Having said that, the most important issue is wisdom and experience. The more experience, the less important either CPA or MBA become.

Great question and I have read some great feedback so far. My two cents: Like many others said already the company defines the role. A controller title in one company may be more accounting/transaction focused, but at smaller company it could mean transactional duties as well as strategic planning/budgeting. So it is important to know what your career interests are and target your job search and training/development accordingly. But generally speaking a CPA is more useful and relevant for a Controller and an MBA for CFO. But aside from certifications and designations next to your name relevant experience matters as well.

Interesting stats in the latest Crist | Kolder Volatility report.

Crist | Kolder reports that while 30% of Fortune & S&P 500 company CFOs hold CPAs, for the first time ever 10% have investment banking backgrounds.

As an MBA with a CPA who's also a former CFO, I think that, unless the MBA is from a top-tier school (mine is not), it's a waste of time. There is just not a lot of difference in terms of time demands and brain-stretching between the bachelor's level and the master's level in business. The big jump in business schools is from the MBA to the PhD. In economics and other departments in liberal arts, however, the reverse is true: the brain-stretcher is from bachelor's to master's; the PhD there is just more of the same.

CFOs today need much more accounting knowledge than they needed to have Pre-SOX. That is less true--but still a good idea--in non-public companies. In many of those companies, unfortunately, the reverse is true: the Controller often doubles as the CFO, but with zilch knowledge about corporate finance, capital budgeting, etc. A pure bean-counter as a CFO in a private company is a menace to the owners' health.

@Cindy Kraft: I'm very surprised that the percentage of public-company CFOs who are CPAs is only 30%. I would have thought that the personal sign-offs on financial statements that SOX requires would have raised that percentage hugely. If I were a public-company CEO without a strong background in accounting and finance, I'd INSIST on a CPA, preferably one who also has an MS in finance. These days the public-company CFO has to have far greater knowledge of the nuts-and-bolts of GAAP than she or he did pre-SOX when an external focus on corporate finance was the norm.

Also, Cindy, as for i-bankers being CFOs, I infer that you're drawing a line between them and CPAs. If that's the case--and the i-banker contingent has no CPAs (it's possible, but most unlikely, I think)--well, I'll just sit back and wait for that trainwrecks on the horizon to arrive and show the boards of those companies the errors of their ways. If PCAOB ever gets its act to the level it should be, those i-bankers will be in a heap of trouble. If, as CFOs, they try to game GAAP the way that tax lawyers game the IRC, they're going to feel as if they'd signed up to be designated javelin-catchers, not 'just' CFOs.

I know a couple of exceptions--but precious few--to what I'm about to say next: The i-bankers I've seen are always sure that they're the smartest people in the room, to borrow the title of that book about Enron. And, truth be told, there's some justification for them to think that: Wall Street and the Too-Big-To-Jail banks fleeced the American taxpayers for $700B and went on their merry way. They didn't miss a beat.

And anyone who thinks that Motormouth Trump is popular now needs to fasten their seatbelts if he starts talking about Wall Street and the TBTJ banks. It'll make what he's saying about immigration sound like the mush-mouthed diplomacy-speak that comes out of the UN.

After completing the CMA accreditation and advancing to the Controller level, both in public and private companies, I pursed an MBA. Earning both has provided the necessary tools and skill sets to reach beyond accounting and finance. Using finance as a platform, the MBA has allowed me to become a better financial and strategic leader. When combined, the credentials provide that intellectual horsepower to connect with the business and see through different lenses. The result is the impact and influence one can make and the overall contributions you add to the organization. That said, it's how you apply what you've learned. While answers are important, it's the questions you arrive at to drill down and solve business problems with colleagues that makes the difference.

For the earlier contribution in this blog where it was shared that if one was either a Controller or CFO, then that person could earn a graduate degree. I say perhaps, yet not always the case. It takes a keen beginners mind to learn and then go apply. Not everyone can do that and not everyone leaves their ego at the door.