CFO Chief Fiddling Officer
So CFO does not stand for Chief Financial Officer but chief fiddling officer because they ‘manage’ earnings in the financial statements.
I did not invent this title. I saw it by chance searching for accounting articles in The Economist [1] and being an accountant myself, I thought I would muse about it.
The subject matter has nothing to do with musical accountants, more to do with cooking, as in cooking the books!
Managing earnings is not the same as fraud or cooking the books. The temptation for accountants to adjust the numbers, according to The Economist, is great, because of published targets and their remuneration connected to them.
Is it true that CFO’s manage earnings? Many people believe that accounting is a science so by definition earnings or even financial statements as a whole are either right or wrong, and if they are wrong it is either because a mistake has been made or because someone is fiddling the books. This someone is the CFO.
Accountants, I think, tend to promote the myth that the reported earnings number they have calculated is a scientific calculation set in stone. The science could be true, but any CFO will tell you that large doses of judgement and estimating go into calculating earnings whatever the size of the company.
The three levels then are fiddling, managing and estimating when calculating earnings. Estimating is not fiddling, though some believe it is managing. Fiddling though could be a step beyond managing towards frauding.
Note: The Economist 4th July 2002 https://www.economist.com/unknown/2002/07/04/the-changing-chief-financial-officer