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Abstract
The traditional image of a CFO is one of glorified "bean counter", whose primary responsibility is to prepare the books and report back to higher level management on the overall financial risk and performance of the enterprise. However, rapid globalization of Australian business, the impact of information technologies, changing business and organizational structures, the growing importance of strategic alliances, and a new focus on value creation has challenged this traditional role of the CFO. The importance of the CFO in performing a more integrated and proactive 'strategic' and 'value creation' role pervades the professional literature.
This study reports the results of an attitudinal survey of 241 CFOs drawn from the private and public sectors. The survey findings indicate that whilst CFOs still rate traditional aspects of their role and function quite highly, however value creation and strategic activities and priorities are gaining ascendance. Further, the results show that the value creating activities of CFOs are more directly related to overall strategy contributions within the organization than with direct measures of organizational performance, such as EPS and ROA. The study contributes to a greater understanding of the desired skill sets, knowledge and professional responsibilities of tomorrow's accountants.
Keywords
Strategic Contribution of CFO
Value Creating Role of CFO
Attitudinal Survey
Accountant's Skill Sets
Introduction and Hypothesis Development
The traditional finance function has a unique role in any business organization - finance interfaces with all points in the value chain and has more direct contact with other functional departments and divisions than most other areas. The finance function also has overall responsibility for information management and delivery and acts as the interpreter, communicator and educator regarding the financial impact of various management decisions.
However, rapid economic and technological change in the world in recent years has led to questioning among professional accounting bodies of the role of the traditional finance function in businesses, and renewed concerns among professional accounting bodies about the skill sets, knowledge and professional responsibilities of tomorrow's accountants. Key factors driving reappraisal of the traditional finance functions include the rapid globalization of Australian business; the impact of information technologies; changing business and organizational structures; the growing importance of strategic alliances; and a new focus on value creation, resulting in activities that do...