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Accounting & Audit

Do MBAs or CPAs Make Better CFOs?

CEOs have turned the CFO into their advisor and second-in-command. The CFO is like the Hand of the King in Game of Thrones, the one person who has the courage and knowledge to question the ruler.

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There is an ongoing, unresolved debate about the proper qualifications for a Chief Financial Officer. Following the Enron scandal and Sarbanes-Oxley Act, CPAs were in vogue. The corporate world needed to implement SOX and re-earn the public’s trust. No one was better suited to that job than a CPA, as I’m sure readers of CPA Practice Advisor would agree.

After the Great Recession of 2008, though, the economy began a record-long growth spurt. It required CFOs to help scale companies as fast as possible and drive IPO, M&A, and other liquidity events. Throughout, CEOs required more of a “strategic partner” and less of a “bookkeeper.”

But what does “strategic partner” actually mean?

In practice, it means that CFOs are increasingly MBAs with investment banking or consulting experience. At the 1,000 largest US public companies, the portion of CFOs with CPAs dropped from 46% to 36% between 2014 and 2019, The Wall Street Journal reports.

Recent opinion pieces seem to take the MBA’s side more often than the CPA’s. The degree and certification, of course, are just proxies for several skillsets that rarely coexist in a CFO. It’s a mistake to let three letters replace clear thinking about this critical position.

My goal is to further this conversation by speaking frankly about the CFO skillsets and popular assumptions about them. Trust me, you’re not going to like or agree with everything I have to say, but I am a believer in people, not their degrees or certifications. I think CPAs should understand the biases obstructing their road to CFO.

The Advisor Role

CEOs have turned the CFO into their advisor and second-in-command. The CFO is like the Hand of the King in Game of Thrones, the one person who has the courage and knowledge to question the ruler.

The CEO wants to go to the CFO with wicked problems and unanswered questions, whether it’s about M&A opportunities or how to incentivize a sales team. She isn’t looking for a pollyannaish response—she’s looking for the truth. She values the honesty that comes with the partnership. The CFO is her partner in thinking, planning, and brainstorming.

In this advisor role, the CFO is more of a people person and conversationalist and less of a chief accountant, tax specialist, or even worse, an auditor. Fairly or not, MBAs have a reputation for understanding the complex, subjective nature of business from the perspective of leadership. Ostensibly, they think “outside the box.” CPAs are relied on to provide a more rigid, historical, and objective viewpoint formulated with structure. CPAs are used to boxes.

The Case Study Method of business school exposes MBAs to problem-solving in a diverse set of industries and scenarios. From organizational psychology, branding, and HR benefits to logistics, M&A, and trade regulations, MBAs know a little about a lot. They may not have answers, but they can at least ask smart questions.

Meanwhile, CPAs are known to be highly specialized at one thing: following a well defined set of rules and regulations to ensure the accuracy and completeness of a company’s financial performance and pass the scrutiny of an audit. The perfect CPA is meaningless as a CFO and advisor if he or she cannot translate the numbers into information that helps the CEO make decisions.

When a CEO interviews CFOs, he or she imagines what it would be like to ask these CFOs for advice every day of every week for multiple years. The CEO wants to not only be enlightened but enjoy a conversation with someone who speaks the same language—the language of business leadership, change, market navigation, and growth. That language is more natural to a financial executive who looks forward than to an accountant who looks backwards.

The Public Communicator

Fairly or not, CPAs aren’t known for their communication skills. Many struggle to explain what they know to non-CPAs. That’s not unique to their profession. Coders, engineers, doctors, and even marketers have the exact same problem.

Thus, many CEOs more easily envision an MBA being their wing mate during a board meeting, quarterly shareholder call, or funding pitch. The elite MBA programs, centered as they are around networking, produce some skilled schmoozers.

The CEO wants to give audiences an inspiring, visionary, narrative-style perspective on the business. Then, the CFO is supposed to win over the skeptics by telling the same story in numbers. Right or wrong, social MBAs are expected to be better at that role than technical-minded CPAs.

The Investigator

MBAs may be dominating the CFO role, but here’s why I wouldn’t count CPAs out. CPAs are trained to be investigators, researchers, and analysts who take nothing for granted. A CPA has a finely tuned BS detector and isn’t afraid to use it. These days, every company professes to be “data-driven.” I say that’s unlikely unless there’s an investigative CFO checking reality for the whole C-level team.

The heads of sales, marketing, HR, IT, and other departments each have a big, triumphant story about what they’re doing for the company. I cannot tell you how many B2B technology companies are built around creating data just to help these executives substantiate their value. They come to meetings equipped to tell the CEO and board a tale about how awesome they are.

The CFO should be the C-level auditor, the person who vets those stories and asks brutally hard questions. I don’t think MBAs are nearly as well equipped as CPAs for that job. A CFO who can immerse in the financial data and use it to question the narratives coming from “vanity” data is rare—and highly desirable.

The Next CFO

Although MBAs have a reputation for being better advisors and communicators, I believe the CPA’s skillset is rarer and underutilized. The strategic CFO combines the skills for which the CPA and MBA are proxies.

So, let’s distill the advisor, communicator, and investigator roles down to three bullets that describe a “strategic” CFO:

  1. The CFO has the business awareness, analytical skills, and interpersonal abilities to advise CEOs through their toughest moments and decisions.
  2. The CFO can communicate financial data in the form of a compelling story that non-accountants understand.
  3. The CFO investigates everything. She gets to the bottom of the bottom of what a company wants to achieve. She digs for unseen centers of profit and loss.

The point is not to stop hiring MBAs and only hire CPAs, or vice versa. In a perfect world, every CFO would have a CPA and an MBA, or at least the skills they reflect. Is that too much to ask?


Eyal Feldman is the founder and CEO of Stampli, an AI-based automation platform that streamlines the accounts payable process.