a two-day CPA exam before they can obtain certification. In addition, Eldridge says, most states require approximately 40 hours of education each year to maintain the license.
Know your needs. Look ahead and be specific. For smaller firms, say with less than $1 million a year in revenues, a strong financial foundation is important. “In a smaller organization, you have to be able to do the foundation right,” says Daniel Dennis, managing partner of Daniel Dennis & Company L.L.P., a certified public accounting firm in Boston. That means someone who can “produce good, solid financial statements with an accounting system that works,” he says.
Larger firms can be more flexible, but in either case, prepare a shopping list of requirements, Eldridge says. Is your company planning to restructure or go public in the next few years? Then look for someone with experience or expertise specific to your industry.
Go beyond the rÃ©sumÃ©. In the wake of recent financial scandals, companies have been conducting extensive background investigations, ranging from reference checks to driver’s license and criminal background checks to psychological testing and credit checks. “If [a candidate is] behind on paying bills, and this person has access to all of your assets, many companies might feel a little nervous about that,” Eldridge says. Executive background checks offered by Atlanta-based ChoicePoint have grown extensively. The three-day process costs about $125.
In addition, Hunter recommends that companies check the Securities and Exchange Commission’s Website for any restatements associated with CFO candidates.
Consider the intangibles. In addition to technical skills, leadership is a major factor, experts say. Griffin-Hunter recommends asking CFO candidates about financial projects that they have managed, including the obstacles they overcame to complete them, the outcome of the projects, and whether they were completed on a timely basis. “This person has to be able to say ‘no’ or ‘yes’ to the CEO, to the employees, or to the board on financial matters that impact the company and, ultimately, the investors and other stockholders,” she says. Furthermore, a CFO must be an excellent communicator and team builder says Smith. This allows a CFO to receive and deliver accurate financial information through the line of communication and continue an ongoing dialogue with the CEO.
Get experienced help. Eldridge recommends working with an experienced search firm that specializes in conducting CFO searches. Korn/Ferry and The Hollins Group are among them.
Both Griffin-Hunter and Eldridge point out that there are good chief financial officers who are not certified public accountants, and solid corporate finance staffs are usually made up of a mix of both M.B.A.s and CPAs. Some chief financial officers are both. “The truth is you really have to have a moral compass,” adds Smith. Eldridge agrees. “Just because you’re a CPA doesn’t mean you’re not going to do bad things,” he says, but CPA certification “is almost like a Good Housekeeping Seal of Approval.”