In 1979, the Financial Accounting Standard Board (FASB) issued Statement 33. In 96 single-spaced pages, it covered many technical topics including Historical Cost/Constant Dollar Measurements and Increases or Decreases in the Current Cost Amounts of Inventory, and Property Plant and Equipment. It also made companies realize the need for a Chief Financial Officer. FASB’s decree increased the financial and accounting reporting requirements for companies across all industries.
Companies began to realize their top financial person could not just “manage” the bookkeeping, budgeting, and tax reporting. Suddenly, companies began to add the CFO to their executive team. In fact, there is compelling research regarding the issuance of Statement 33 and the rise of the CFO.
Today, the role of the CFO is even more important. Business owners with firms of all sizes and in all industries are faced with many challenges and opportunities: access to nearly instantaneous data; pressure from lenders, banks, and private equity investors; a shrinking world where innovation and strategy are required to survive; and perhaps a desire to leave a legacy or just give their employees a good place to work.
Statement 33 gave rise to the CFO, and Statement 33 helps make your company better.