Chief financial officer (CFO)

Definition

The Chief Financial Officer (CFO) is the senior executive responsible for managing the financial actions of a company. Their duties include tracking cash flow, financial planning, and analyzing the company's financial strengths and weaknesses to propose corrective actions.

5 Must Know Facts For Your Next Test

1. The CFO plays a crucial role in establishing and maintaining internal controls within an organization.
2. They are responsible for ensuring accurate financial reporting to prevent fraud.
3. The CFO works closely with auditors to ensure compliance with regulations.
4. They oversee all aspects of the company's cash management system.
5. A key responsibility includes assessing risks that might affect the organization's financial stability.

Review Questions

• What are the main responsibilities of a CFO in terms of internal controls?
• How does a CFO contribute to preventing fraud within an organization?
• Why is it important for a CFO to work closely with auditors?

Related terms

Internal Controls:

Processes implemented by an organization to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

Financial Reporting:

The process of disclosing financial information and performance over a specific period, often in annual or quarterly statements.

Auditors: Professionals who examine financial records and statements to ensure accuracy and compliance with accounting standards and regulations.