Financial Reporting: Getting It Right the First Time

Now that CFOs are, in effect, signing off on financial statements to the SEC rather than to auditors, it's crucial that financial reporting be spot-on.

The qualifications for a CFO job that executive search firm Russell Reynolds Associates received earlier this year from a leading financial institution fell in line with similar requests from other Fortune 500 companies. "They were willing to consider a highly talented, younger finance executive who was not a sitting CFO of a public company and who hailed from either the treasury or the control side," recalls Gordie Grand, who leads Russell Reynolds' financial officers practice. But not

long after presenting those specs, Grand's client reshuffled its priorities. "They said, 'We need a public-company sitting CFO, somebody with an outstanding track record in control accounting, financial management and information systems,' " he says. "They felt that they could not take the risk on somebody who isn't clearly recognized to have those abilities."

Other executive search experts agree that public companies are expressing a rekindled interest in CFOs who excel at collecting, controlling and certifying the numbers that flow within -- and, more important, out of -- their organization. The old news that CFOs need to know their company has taken on new urgency because of the accounting crisis, the passage of the Sarbanes-Oxley Act and the dispiriting economy.

The best finance executives have always treated financial reporting as a key activity. Now all CFOs and finance departments must do so, or they will face grave consequences from the investment community, and possibly from the SEC. CFOs who want to hear from executive and director search firms need to understand the importance of following the new corporate responsibility law, implementing appropriate control mechanisms and retooling their skill set if necessary.