Editor's note:This article is the second in a series by CFO Dive exploring how technology and rapidly changing expectations are reshaping key roles within the finance function. The first article in this series focused onthe evolution of the Controller role。

Facing new ways of working and waves of technology, finance professionals such as Chief Accounting Officers (CAOs) are finding their traditional roles transforming to meet modern enterprise needs. The CAO is one of the most senior members of the finance team, typically rankingjust below the CFO。

Similar to the Controller, the CAO serves as a trusted partner and advisor to the finance leader. But when discussing the difference between the CAO and the Controller, Lauren Hotz, CAO of software provider Intuit, said, "When I think at the CAO level, the perspective is a bit broader."

Broadening the perspective

Hotz has worked at the Mountain View, California-based tech company, which owns products including QuickBooks, TurboTax, and Mailchimp, for nearly two decades. According to her LinkedIn profile, she has held various roles at the company, including Vice President of Finance and Corporate Controller, and has served as CAO since February 2022.

For example, the quarterly close process or how accounting policies are implemented across the organization typically falls under the Controller's purview. As CAO, Hotz is responsible for "areas related to financial systems and governance." She said she spends much of her time focused on compliance work, working closely with Intuit's Chief Audit Executive on Sarbanes-Oxley-related compliance and overall governance.

"I spend time on other types of compliance, looking at what we produce externally, like scripts, press releases... ESG, all the new climate rules, cybersecurity," Hotz cited as examples. "In these functions, the perspective is indeed broader, and that's where my peers and I really focus."

The expanded scope of responsibilities means the CAO plays a critical role in the finance function, which is reflected in their compensation. According to Salary.com, the average annual salary for a CAO in the U.S. is $238,200, with a salary range between $238,200 and $334,100.

In the context of CFOs needing to process an increasing volume of information quickly, the CAO is a key partner for the finance leader. Patrick Villanova, CAO of Blackline, a Los Angeles-based AP automation software provider, said CFOs today are expected to "be data experts, process experts, and systems experts."

This expectation then cascades to the rest of the finance function, with many responsibilities historically held by the CFO now shifting to the CAO—Villanova described a "symbiotic relationship" between the two roles in an interview.

CAOs can step into some processes overseen by Controllers, such as account reconciliations, but they are also expected to support the CFO in strategic decisions. Villanova said the close working relationship between the two is particularly critical as finance leaders need to handle growing data volumes to do their jobs.

"So what's happening now is a data explosion; every company is generating massive amounts of data because we have the computing power to do so," he said. "The challenge is interpreting that data, ingesting it, and turning it into information and insights. That's the challenge many CFOs face."

CAOs, already process experts, are taking on the critical task of ensuring information is accurately delivered to the CFO.

CAOs also need to work closely with CFOs to ensure the enterprise's finance and accounting functions run smoothly. For Hotz, the two CFOs she has worked with during her tenure as CAO at Intuit—since she took the role—both had backgrounds more in financial planning and analysis (FP&A) than accounting, "so strategy, operations, and segment finance functions always received more attention," she said.

"I think the key to the role between the CFO and CAO is excellent communication, understanding what information is important to them and what isn't," Hotz said. As CAO, Hotz also carries a fiduciary responsibility that goes beyond reporting relationships, "and effectively fulfilling that responsibility is part of what I demand of myself," she said.

"It's not always what people want to hear, but it always serves risk management and governance, because as executives and signatories, we have responsibilities to the public and the market," Hotz said.

Making room for strategy

The evolution of the CAO is part of a decade-long trend affecting the finance function. According to Oracle, as CFOs move into more strategic roles, CAOs arebeginning to take on more"tactical and operational tasks that CFOs once dominated."

According to a 2022 report by executive search firm Spencer Stuart, today's CFOs are also less likely to be involved in the day-to-day matters of accounting, tax, or related topics, and CAOs are increasinglyabsorbingthe responsibilities left by CFOs.

"We are SOX experts, process experts, and we generate the actual information and actual financial results," Villanova said of the CAO's duties. "So it really starts with the accounting leader, ensuring systems and controls and automation are in place to get information to the CFO as quickly and accurately as possible."

Hotz said the evolution of the finance function allows it to provide more help to the rest of the organization, but it also brings benefits to finance itself.

Earlier in her career, "this idea of being a connector across the organization was to serve the fact that if we can connect the dots and help move things forward... we can identify some issues early on," she noted, citing activities like product and new market launches. "Then that helps us ensure operations, reporting, and accounting are done correctly."

When accounting skills are merely the baseline requirement for the finance function, playing the connector role is even more critical for today's finance departments. Hotz said finance is steadily being asked to influence company decisions while maintaining a focus on governance.

This shift means finance professionals now "get involved in many things that require deep business acumen and go beyond the scope of a pure accountant," she said. "You have to have leadership and influence."

AI and the future of finance

Emerging technologies are accelerating the evolution of finance, as CFO Dive previously reported, and this haschanged the way Controllers, finance leaders, and other key finance executives work and their daily responsibilities. The "new CAO" will be seen as someone who bridges the gap between finance and data science, said Greg Selker, Managing Director at executive search firm Stanton Chase.

"The new definition of the CAO is someone who must have a fundamental understanding of data science," Selker said in an interview. "They don't have to be a data scientist, but they need to be able to talk about business processes—especially from an analytical standpoint—what can be automated with AI, and then work with data science teams to integrate those concepts into data science."

While integrating emerging technologies is not new—Intuit, for example, has been using robotic process automation and other forms of AI for years—generative AI represents a new phenomenon that companies are closely watching, Hotz said.

"I would say what's really shifting now is probably, how do we do this?" she said of GenAI. "How do we get some of the benefits faster, at a higher speed than we have in the past?"

She said companies are still in the early stages of experimenting with GenAI, which has the potential to help automate some of the time-consuming, routine tasks that occupy accountants' time. Bringing AI into the accounting function can enable things like faster expense categorization or faster account reconciliations, automating key processes such as procurement, accounts receivable, and accounts payable—"all these areas will ultimately fall under the CAO and Controller," Selker said.

"At the end of the day, what is the level of interaction? What is the level of influence?" Selker said. "Given that the CAO is responsible for all data, it makes sense that the CAO has a say in what the data means."

For CAOs themselves, automation allows them to free up time for the data analysis that companies are increasingly asking finance departments to perform, rather than just spending time compiling information.

Hotz views the technology as "an aid to get work done faster, better, and possibly at a higher scale," she said—a tool that still requires the accountants using it to maintain control and judgment.

"I can't say AI itself will change the scope of my role," she said. "It might just change the way I do certain things."

The introduction of AI is not only affecting how the finance department works, but also the skill sets and experience of the people doing the work. For example, Villanova said more than 10% of his team is purely focused on systems and automation, and they sit within the accounting organization.

"The fact is, you might now see up to one in five people in accounting and finance who are not accounting or finance experts," Villanova said. "They know enough to understand it. But their core skills are systems, AI, automation, and data."