Chief Accounting Officer Interview Questions: What a Board Tests

Chief accounting officer interview questions are put by directors who want to know one thing before they sign off the appointment: when the group's results are under pressure, will this person hold their position? The role owns how the accounting standards apply to the group and stands behind what the group publishes. JOH Partners, which has closed more than 1,000 senior mandates since 2014, hears from audit committee chairs that technical knowledge is rarely the doubt. The doubt is whether the candidate will say no to a persuasive chief financial officer, and say it clearly enough for non-accountants on the committee to follow. This guide is for finance leaders interviewing for a chief accounting officer, principal accounting officer or head of financial reporting role.

It sits with the other finance role interview guides. The role itself, and why Gulf groups tend to appoint it late, is set out in JOH's perspective on the chief accounting officer. Here the focus is the interview.

What does an audit committee want to learn from a chief accounting officer candidate?

Whether the person in front of them will be the one who decides how a hard transaction is accounted for, and then lives with the decision.

That sounds narrow, and it is. A chief financial officer is asked about strategy, capital and the market. The chief accounting officer is asked about a lease, a contract, a joint venture and a loan from a shareholder. The committee wants to see that you can take a messy set of facts, apply the standard, reach a conclusion and say why.

It also wants to see temperament. The people who do this job well are rarely dramatic. They are calm, precise and hard to move when they are right. A chair who has watched a finance team bend under pressure will be looking for evidence that you do not.

Where does this role end and the neighbouring roles begin?

Boards confuse the neighbours, and candidates should not. Three boundaries come up in the interview.

The group financial controller runs the reporting and control engine: the close, the consolidation, the reconciliations. The chief accounting officer decides what the standards require for the transactions the group has actually done, and is accountable for the notes. The chief financial officer leads the finance function and answers for the numbers to the chief executive and the board. The chief audit executive tests the controls after the fact. That is assurance, not preparation, and the two roles should not be mixed.

In a group of moderate size one person may hold two of these jobs. Be ready to say which parts of the work you have done and which you have only supervised.

Which accounting judgements do chief accounting officer interview questions put in front of you?

Expect specifics. The committee may give you a short case and ask for your view. Common ones in a Gulf holding include the following.

A long construction or services contract where the customer may change the scope. When is revenue recognised, and on what evidence? A company in which the group owns forty-five per cent but appoints most of the board. Does the group control it, and what follows if it does? A shareholder loan at no interest, given years ago by the founder. How is it measured, and how is it disclosed? A property leased from a company the family also owns. What are the terms, and who has looked at them? An asset that was bought at the top of the market and now produces less than it cost. Is it impaired?

You do not need to produce a perfect answer on the spot. What the committee listens for is the order in which you think. Establish the facts. Name the standard that applies. Say what you would need to see. State your provisional view, and say what would change it.

Anyone can read an accounting standard. A board wants to know whether you will put your name to the answer when someone senior would prefer a different one.

What do you say when the chief financial officer wants a different answer?

This is the centre of the interview, and it will be asked more than once and in more than one form. Why did you disagree with the chief financial officer? What happened to the relationship? How did you decide that you were right?

A good answer is not about winning. It describes a real judgement, the other side's best argument, and how you tested your own view before you held it. It says who else you consulted, which may be the external auditor, a technical adviser or a peer at another company. It says what you wrote down, because a position that is not in writing is easy to move.

Then tell the committee what you did when the disagreement could not be settled. The honest answer in a well-run group is that you took it to the audit committee chair, with the chief financial officer aware that you were doing so. The chair will be looking for that. A candidate who says "I always find a way to agree" has not been tested. A candidate who says "I would go to the committee" with no steps in between has not learned how to work in a team.

If you have once been persuaded to accept a view you later thought was wrong, say that too. Directors trust a candidate who can describe a judgement they got wrong, what it cost and what they changed. That is the nearest thing to a reference an interview can offer.

How do you explain a judgement to people who are not accountants?

Audit committees include experienced directors who are not accountants, and some of the most useful questions come from them. The test is whether you can explain a judgement in plain language and in under two minutes.

Practise one. Pick a real accounting decision, perhaps how a long contract's revenue is recognised, and explain it as you would to a non-executive director who has run a retail business. Say what the standard asks, what the choice was, what the numbers would have looked like the other way, and why you chose as you did. If your explanation needs a technical word, define it in a sentence.

A chair will also ask about what you do not say. What would you tell the committee that management would prefer left out? The right answer is not that you would tell the committee everything, which is unrealistic. It is that you would tell them anything that bears on how reliable the accounts are, and that you would say so to the chief financial officer first.

What does a Gulf holding add to the questions?

Several things, and the committee will test whether you have worked with them.

The first is the reporting standard. IFRS Accounting Standards apply to publicly accountable entities in the region, and applying a global set of rules to a family group takes judgement. The second is tax. Saudi Arabia has long applied zakat and income tax to companies, and the UAE's federal corporate tax applies to financial years beginning on or after 1 June 2023, as the UAE Ministry of Finance sets out. A group with entities in both countries has two regimes to reflect in one set of accounts, and the chief accounting officer will be asked how. For a listener's view of what that compliance work looks like in practice, see David Daly's conversation on business turnarounds in the UAE.

The third is related parties. IAS 24 requires disclosure of transactions with related parties, and in a family group those can be many and informal. Expect a question about how you would find them all. The fourth is consolidation across entities that were never designed to be consolidated. JOH's research on group finance leadership in the Gulf covers who owns each of these tasks beneath the chief financial officer.

The sector background for diversified groups is on the group holdings sector page. JOH's engagement building three group functional leaders into a Tadawul-listed Saudi industrial holding is an example of the setting in which this role is hired.

What should you ask before you accept?

Ask about authority, because the title may promise more than the structure delivers. Does the role report to the chief financial officer, and does it have a line to the audit committee chair? Would you meet the committee without management present, and how often? What happened the last time the group's accounting position was challenged by the auditor? Is the policy manual written down, and who has the final say if you and the chief financial officer cannot agree?

Ask who has done the job before you, and why they left. If the last holder resigned over a disagreement, you should know what it was. And ask what the group is preparing for. A listing, a bond or a major disposal changes the weight of the role.

The first question to ask an audit committee chair is whether you would meet the committee without management in the room. If the answer is no, the job has less authority than the title says.

How do you rehearse for the judgement questions?

Write out three decisions from your career: one you got right under pressure, one you got wrong, and one where you changed someone's mind. For each, set down the facts, your reasoning and what you would do differently. Then practise saying each in two minutes, aloud.

Read the free judgement under pressure interview question bank on AssessYou, with how to approach each question and example answers, which covers disagreeing with a chief executive or board, taking hard decisions and delivering bad news. The approaches there are written for senior interviews generally, so adapt each to a technical accounting setting. The full list of free banks is at assess-you.com/interview-questions, open to read without an account. When you want your own answers tested against your own CV, with candid feedback, sign up to AssessYou. AssessYou is the JOH Partners candidate platform.

The audit committee chair's last question is often the simplest: if we appoint you, what is the first thing you will tell us that we would rather not hear? Have an answer ready that is true.