This report presents the results of our survey of the background and training of key financial management personnel at 34 of the largest private corporations and 19 of the largest state governments in the United States. We asked surveyed organizations for information on the education, work experience, training, and professional certifications of their key financial management personnel—chief financial officers (CFO), controllers, and managers and supervisors—working in financial reporting, financial analysis, and accounting operations positions. In addition, we asked for information on training and qualification requirements for these personnel. Overall, our survey results provide information on about 4,900 private sector and state government financial management personnel. Qualified personnel can play a variety of important roles in establishing and maintaining a strong, successful financial management organization. Specifically, qualified personnel can provide leadership in the efficient use of an organization’s financial resources by promoting effective general and financial management practices; serve as an integral part of an organization’s decision-making by providing timely and reliable financial and performance information and by analyzing the implications of this information for the organization’s goals and objectives; and help ensure that the organization’s assets are safeguarded from fraud, waste, and abuse by improving its accounting systems and internal controls. While the accounting profession has focused on the first and last roles for many years, a number of studies indicate that financial personnel are increasingly being asked to take on the second of their potential roles, that of a “business partner” in organizational decision-making. In the past, the accounting function was paper-driven, human resource intensive, and clerical in nature. In many organizations today, recent advances in information technology, as well as competitive pressures and corporate restructuring, have combined to dramatically change the accounting function from a clerical to an analytical and consultative focus. According to a 1996 report by the Institute of Management Accountants (IMA), the management accounting profession has been in transition for the past 5 to 10 years. The study found that management accountants are increasingly being asked to supplement their traditional accounting role with more financial analysis and management consulting. Specifically, the IMA study reported that accountant work activities most critical to company success now include not only traditional financial management skills—those associated with accounting systems and financial reporting—but also strategic planning, internal consulting, and short-term budgeting processes. The IMA study characterized this change as a “. . . shift from number cruncher and corporate cop to decision-support specialist.” A recent study by a major public accounting firm also underscored the need for financial management personnel to have financial expertise, augmented by interpersonal and communication skills, an enterprise perspective, initiative, and overall organizational savvy. These evolving expectations for accountants parallel a similar movement in the auditing profession. As a result of technological innovations, coupled with complex business structures and other economic forces, auditors are being asked to provide a wide range of services that go beyond the traditional audit of historical financial statements, such as management consulting services. Auditors are increasingly being asked to be substantially more involved with the functioning of business systems than just attesting to the reliability of reported financial data. Major change is also underway in the federal financial management arena. The Congress has taken various steps to help ensure that federal agencies improve their financial management. One of the key pieces of legislation was the Chief Financial Officers Act of 1990. The CFO Act spelled out an ambitious agenda for financial management reform, including expectations for the (1) deployment of modern systems to replace existing antiquated, often manual, processes, (2) development of better performance and cost measures, and (3) design of results-oriented reports on the government’s financial condition and operating performance by integrating budget, accounting, and program information. The Government Management Reform Act of 1994 expanded and made permanent the requirement in the CFO Act for audited financial statements to the 24 largest federal departments and agencies and mandated annual audited governmentwide financial statements. The CFO Act also established chief financial officers throughout government to provide needed leadership. One of the key responsibilities assigned to agency CFOs is overseeing the recruitment, selection, and training of personnel to carry out agency financial management functions. The development of highly qualified financial managers will be crucial to successfully implementing the CFO Act. We have reported many instances in which the federal government’s ability to produce accurate financial data was undermined simply because personnel with financial management responsibilities did not follow rudimentary policies and procedures, such as accurate transaction processing and routine account reconciliations. Further, the requirements of the Government Performance and Results Act of 1993 call for federal managers to fundamentally shift their focus from a preoccupation with rigid adherence to prescribed processes to assessing the extent to which federal programs have achieved desired outcomes and results. Accordingly, agency financial personnel are increasingly being asked to draw on new sets of skills to produce cost and other performance-based financial data. Such data are essential if congressional and executive branch decisionmakers are to make well-informed decisions on the relative efficiency and effectiveness of federal programs. While these financial management improvement efforts may be new to many financial personnel in the federal government, similar requirements have been in place for personnel in the private sector and in state governments for many years. The disciplined process required to generate reliable, accurate financial data has been in place in the private sector for over 60 years following the 1929 stock market crash, and in state governments since the early 1980s. The financial personnel in these organizations have also had extensive experience in developing and implementing meaningful financial performance measures. The objectives for this report were to identify (1) the background and training profiles of key financial management personnel working at large private sector corporations and state governments and (2) the qualification requirements applicable to personnel in these positions. To accomplish these objectives, we surveyed the organizations closest in size and complexity to federal agencies. Accordingly, we requested information on the qualifications of key financial management personnel in the 100 largest private corporations in the United States, commonly referred to as the “Fortune 100,” and the 25 largest state governments. To collect profile information on key corporate and state financial management personnel, we designed a questionnaire which was sent to Fortune 100 and selected state CFO/controller offices and their five largest divisions or departments. The design of the questionnaire used in our study was based on a framework for measuring the quality of the federal workforce presented in a previous GAO report. That framework identified education, work experience, training, and professional certifications as quantifiable factors for assessing the qualifications of federal government personnel. In using this framework, we asked surveyed organizations for information on the education, work experience, and professional certifications of their key financial management personnel: chief financial officers, controllers, and managers and supervisors working in financial reporting, financial analysis, and accounting operations positions. We also asked for information on training and qualification requirements for the above mentioned managers and supervisors. To help ensure that the questionnaire was clear and that the respondents’ information would be most relevant to the federal CFO community, we obtained comments from a variety of interested parties and pretested the questionnaire. Specifically, we requested and incorporated, as appropriate, comments on our questionnaire received from representatives of the Private Sector Council; the National Association of State Auditors, Comptrollers, and Treasurers; and the federal CFO Council Human Resources Committee. In addition, an academic consultant from the University of Denver School of Accountancy with expertise in this area reviewed the questionnaire and provided comments. The survey instrument was also pretested at one Fortune 100 company and two state governments. The pretests were conducted through interviews to observe respondents as they completed the questionnaire and to debrief them immediately afterward. On the basis of the advisors’ comments and pretesting results, the questionnaire was revised. Appendix III provides a copy of the final survey instrument. Responses were received from 34 Fortune 100 companies and from 19 of the 25 largest state governments. The 34 Fortune 100 companies from which we received responses represent all major industry groupings except agriculture. Ten of the companies were finance, insurance, or real estate companies, such as BankAmerica Corporation, Citibank, and the Metropolitan Life Insurance Company. Fifteen manufacturing and mining companies responded to our survey, including the Lockheed Martin Corporation, the Hewlett-Packard Company, AlliedSignal, and the Mobil Corporation. We also received responses from nine transportation, communication, and wholesale/retail trade companies, including AT&T, MCI Communications, United Airlines, and SuperValu. The 1995 revenues of the Fortune 100 respondents ranged from $12.7 billion to $79.6 billion.Appendix I lists the Fortune 100 companies, divisions, and subsidiaries responding to our survey. State government comptroller offices and operational departments responding to our survey were located throughout the country and included responses from an average of over four of the major organizations within each of the states responding, ranging from one to six per state, and also included the largest states. For example, we received responses from California, Florida, Illinois, Michigan, New York, Virginia, and Washington. The revenues of the state government respondents ranged from $10.8 billion to $108.2 billion. The state government comptroller offices and other departments that responded to our survey are listed in appendix II. We did not verify the accuracy of the information provided by the Fortune 100 and state government respondents. However, we provided a draft of this report to the parties commenting on the initial survey instrument and have incorporated their comments as appropriate. We conducted our work from June 1996 through December 1997 in accordance with generally accepted government auditing standards. Overall, the survey respondents provided information on 4,930 financial management personnel: 3,621 (73 percent) in Fortune 100 companies and 1,309 (27 percent) in state governments. Table 1 shows the positions held by the financial management personnel about whom information was provided. The Fortune 100 personnel about whom information was provided worked in 1 of 34 corporate offices or 54 corporate divisions or subsidiaries, as listed in appendix I.