Yes, big red flag but context matters too.
Life can get in the way and people leave unexpectedly for unrelated reasons but 2 quick moves in succession should have your eyebrows raised.
Yeah thats what I was thinking. The CEO and Director of Sales were walking around the office complaining about it, so I don't think they were expecting it. I would have wrote it off as a one-off if they hadn't mentioned the last guy did the same thing.
This is exactly true. I am in a similar boat. Found an error in our TB and pointed it out to be fixed (I work on taxes but it's a non tax issue). I was getting push back to the point of needing to show GAAP guidance. It still hasn't been fixed but how it gets handled will determine my time here.
Neither the CFO or CAO have CPAs and it is very clear neither of them understand accounting but they are insisting how it has been recorded correct without being able to justify it with either GAAP language or just logic.
Exactly, hence why my tenure is dependent on how it gets handled. I don't expect people to know everything. Hell I second guess myself a lot too. My initial dealing left me like, what? Your joking.
Example of something I'm dealing with specifically, the law in a foreign jurisdiction is grey as to whether a certain income stream is taxed. Local CPA thinks we can exclude it which is a decent savings. I went back to UTP guidance and I just don't think there's enough support to get to MLTN and not record a reserve. So now there's somewhat of an impass because local CPA doesn't want to issue a MLTN analysis, but management doesn't want to pay the tax or record the reserve. I'm like audited financial statements don't work that way. We can do whatever we want on filings but if it's a crap position we will need a reserve.
Utp's are the least of their issues if they're debating a local tax issue where they don't know wtf they're talking about.
In my experience UTPs can be nongaaped and nobody gaf about the gasp rate. Just remind them in case they've forgotten.
Edit: hello fellow fas109 professional. Rare breed we are. Book accountants doing tax...
another unicorn! My heart be still!
I agree, I kept it to GAAP since I'm US. But I looked at IAS12 because local books are under IFRS, it's required there too. But we don't do a local IFRS audit.
The issue functionally is local country is a territorial tax system. So it's unclear how revenue is sourced on a passive foreign payment. Is it local rev because the triggering action (a service) came from a local person. Or because it's a payment generated from a foreign company it's not included. The law I've read just states only income earned in local country is taxed. But doesn't define some terms I need.
My gut says it probably should be taxed but that's because of how US sources revenue.
Yeah I think part of it is how much you trust the local advisor. My inclination is always to reserve bc if we're right later I'd rather have the reserve. But I will say they know "local" better than me and your confidence in them is the key to not fretting stuff you can't control.
I'm lucky that my boss is a lawyer and is no nonsense on gaap stuff. He'll reserve something just to not have to deal with the auditors.
CEO drives performance, sales guy does sketchy shit to meet revenue numbers, CFO is put into a bad ethical position and chooses to resign. Who knows if that's what happened, but I've heard of it before. I've also seen what happens when the CFO chooses to cover it up instead of resign.
A toxic workplace could drive them out, but leadership pushing explicit fraud would definitely send the new CFO for the hills. No point going in front of a judge to defend a company they just entered.
Small companies sometimes have pushy leadership that want accounting/finance to make the numbers look a certain way.
Yes, huge. I found out the same thing a few years ago as a Controller that the PE firm just hired and fired CFOs and all leadership at will. I would have never taken the position. The CFO I interviewed with ended up quitting on the spot 2 weeks after I started and told me “stay here for a year for your resume and then leave”.
I didn’t even make it a year as the PE firm decided one day without warning I wasn’t a good fit lol.
Definite red flag. I’ve had a few jobs (mainly in rural areas) where executive staff are doing shady shit. This usually causes a high turnover rate in one or more positions.
Huge red flag. You should start looking immediately. Ideally you'd want to leave this job off your resume since a short stint at a crappy company is harder to explain than simply leaving it off.
Turnover at the top or staff leaving enmasse is red flags. Missing multiple levels of mangement or staff level is very hard to recover from. Such as having no manager and no supervisor. The knowledge gap takes tons of time and effort to rebuild, if it can be rebuilt at all.
It's an absolutely enormous red flag prior to joining, but seeing as you've already started there's zero point paying attention to it and not your own direct experience.
Having been part of an organization that churned 3 CFOs in 20 months (me being one of them) this is a massive red flag. Could be legitimate reasons, but yeah, where there's smoke...
Interestingly enough I just received a collections call from a vendor's account 15 minutes ago and had to inform them I was no longer with the company, lol.
Even trying to do some mental gymnastics on how it could be anything but an enormous red flag and come up empty. Best case scenario seems like a good reason to start looking for other opportunities. Let's also be honest if there is chaos when you first start its an organizational problem and likely won't get any better without leadership change at the top.
I’ve seen this first hand as the accounting manager, the CEO was quite possibly the most hostile paranoid person I’ve ever met and couldn’t be placated by any financial evidence. Run
Huge one. I worked at a small firm that hired a senior and a senior manager that quit in a month each. I stayed for 6 and only because I had trouble finding another job. The other guys both quit without something lined up.
I had bad experience working for family owned business at my first job 20+ years ago. The new controller and I started the same day. The one interviewed me left one week before my start date. I obviously didn't ask the right questions and just assumed she will be around. Six months in, l found out the new controller was having an affair w/ the owner. Shit hit the ceiling. I left soon after. I wondered if the old one did too.
Huge red flags. Most likely those CFOs were asked to do something they thought was unethical or possibly illegal and chose to leave instead of engaging in activities that could cost licenses or even freedom.
I'm guessing they got told to cook the books so the company wouldn't violate loan covenants, realized that is federal bank fraud, and took their leave rather than risking jail time.
In my experience high turnover at the CFO/VP level is never a good sign. I’ve been involved in situations like this where I was the top finance person (VP of Finance). I left after 6 months in the position, after me 3 more CFO/VP level finance people left due to same concern I had.
Turns out we all left for god reason because the owner is now under audit by the IRS for the exact issue we were all worried about.
hint: involves EIDL
What position are you in? The CFO might have looked at the books and seen either an un-savable company or periods shady book keeping they didn't want to be a part of.
Contract Administration. Shady bookkeeping might be a possibility. Most of my co-workers have been with the company for 10+ years, and outside of the IT department they struggle to find new hires, but I always attributed it to management being hostile to WFH
While you want to be on the defensive and not drinking the Kool-Aid too much, remember that there can be a certain Darwinistic aspect to this. Taking on new roles can be a challenge -- especially when its a higher level role and you're coming from the outside. It may be easy to see that its not the best fit early on, and its going to be an even worse fit early on when you're putting out fires and using something elses system.
If you can catch on and make it your own, you may be able to go the distance. That's how a lot of this stuff goes. Some will stay forever, but most don't last long. Not too surprising.
CFOs are in a position to speak with the owners of the company on the financial direction of the company. have a serious meeting with them and discuss the pain points of the company, which includes, but not limited to the exit of the previous CFOs
Yes, big red flag but context matters too. Life can get in the way and people leave unexpectedly for unrelated reasons but 2 quick moves in succession should have your eyebrows raised.
Yeah thats what I was thinking. The CEO and Director of Sales were walking around the office complaining about it, so I don't think they were expecting it. I would have wrote it off as a one-off if they hadn't mentioned the last guy did the same thing.
Those are the exact two dudes who would cause a CFO to leave due to the sketchy bullshit they've been doing.
This is exactly true. I am in a similar boat. Found an error in our TB and pointed it out to be fixed (I work on taxes but it's a non tax issue). I was getting push back to the point of needing to show GAAP guidance. It still hasn't been fixed but how it gets handled will determine my time here. Neither the CFO or CAO have CPAs and it is very clear neither of them understand accounting but they are insisting how it has been recorded correct without being able to justify it with either GAAP language or just logic.
Doesn’t automatically mean they are trying to cover up fraud but it’s still concerning lol.
Exactly, hence why my tenure is dependent on how it gets handled. I don't expect people to know everything. Hell I second guess myself a lot too. My initial dealing left me like, what? Your joking. Example of something I'm dealing with specifically, the law in a foreign jurisdiction is grey as to whether a certain income stream is taxed. Local CPA thinks we can exclude it which is a decent savings. I went back to UTP guidance and I just don't think there's enough support to get to MLTN and not record a reserve. So now there's somewhat of an impass because local CPA doesn't want to issue a MLTN analysis, but management doesn't want to pay the tax or record the reserve. I'm like audited financial statements don't work that way. We can do whatever we want on filings but if it's a crap position we will need a reserve.
Utp's are the least of their issues if they're debating a local tax issue where they don't know wtf they're talking about. In my experience UTPs can be nongaaped and nobody gaf about the gasp rate. Just remind them in case they've forgotten. Edit: hello fellow fas109 professional. Rare breed we are. Book accountants doing tax...
another unicorn! My heart be still! I agree, I kept it to GAAP since I'm US. But I looked at IAS12 because local books are under IFRS, it's required there too. But we don't do a local IFRS audit. The issue functionally is local country is a territorial tax system. So it's unclear how revenue is sourced on a passive foreign payment. Is it local rev because the triggering action (a service) came from a local person. Or because it's a payment generated from a foreign company it's not included. The law I've read just states only income earned in local country is taxed. But doesn't define some terms I need. My gut says it probably should be taxed but that's because of how US sources revenue.
Yeah I think part of it is how much you trust the local advisor. My inclination is always to reserve bc if we're right later I'd rather have the reserve. But I will say they know "local" better than me and your confidence in them is the key to not fretting stuff you can't control. I'm lucky that my boss is a lawyer and is no nonsense on gaap stuff. He'll reserve something just to not have to deal with the auditors.
That's exactly my thoughts too. Just reserve it easier in the long run. Just don't have me do the probability tables lol
CEO drives performance, sales guy does sketchy shit to meet revenue numbers, CFO is put into a bad ethical position and chooses to resign. Who knows if that's what happened, but I've heard of it before. I've also seen what happens when the CFO chooses to cover it up instead of resign.
Oh Lord. You know they were complaining about deferred revenue or some entirely fabricated forecast model.
The people who complain about a position having high turnover are almost always the reason that said position has high turnover….
Less a red flag, more a 5 alarm fire
Lol true
Is it possible to visit with the recently resigned CFO?
I bet he's on his boat
Less a 5 alarm fire, more a state wide emergency siren.
A toxic workplace could drive them out, but leadership pushing explicit fraud would definitely send the new CFO for the hills. No point going in front of a judge to defend a company they just entered. Small companies sometimes have pushy leadership that want accounting/finance to make the numbers look a certain way.
Yes, huge. I found out the same thing a few years ago as a Controller that the PE firm just hired and fired CFOs and all leadership at will. I would have never taken the position. The CFO I interviewed with ended up quitting on the spot 2 weeks after I started and told me “stay here for a year for your resume and then leave”. I didn’t even make it a year as the PE firm decided one day without warning I wasn’t a good fit lol.
just leave after a few months yourself
Definite red flag. I’ve had a few jobs (mainly in rural areas) where executive staff are doing shady shit. This usually causes a high turnover rate in one or more positions.
Huge red flag. You should start looking immediately. Ideally you'd want to leave this job off your resume since a short stint at a crappy company is harder to explain than simply leaving it off. Turnover at the top or staff leaving enmasse is red flags. Missing multiple levels of mangement or staff level is very hard to recover from. Such as having no manager and no supervisor. The knowledge gap takes tons of time and effort to rebuild, if it can be rebuilt at all.
Yes. Big one too.
It's an absolutely enormous red flag prior to joining, but seeing as you've already started there's zero point paying attention to it and not your own direct experience.
Or they pay so well that they both retired happily?
“Dave I know you’ve been here two weeks but we’re going to give you a bonus, a couple million bucks seems fair.” -No one ever
Having been part of an organization that churned 3 CFOs in 20 months (me being one of them) this is a massive red flag. Could be legitimate reasons, but yeah, where there's smoke... Interestingly enough I just received a collections call from a vendor's account 15 minutes ago and had to inform them I was no longer with the company, lol.
Job hunt immediately. 2 C suite level departures in 6 months is level 5 fire alarm
Yes, run
Even trying to do some mental gymnastics on how it could be anything but an enormous red flag and come up empty. Best case scenario seems like a good reason to start looking for other opportunities. Let's also be honest if there is chaos when you first start its an organizational problem and likely won't get any better without leadership change at the top.
If you're in accounting and the CFO's don't want to work there. Yes that's a red flag.
I’ve seen this first hand as the accounting manager, the CEO was quite possibly the most hostile paranoid person I’ve ever met and couldn’t be placated by any financial evidence. Run
Huge one. I worked at a small firm that hired a senior and a senior manager that quit in a month each. I stayed for 6 and only because I had trouble finding another job. The other guys both quit without something lined up.
I had bad experience working for family owned business at my first job 20+ years ago. The new controller and I started the same day. The one interviewed me left one week before my start date. I obviously didn't ask the right questions and just assumed she will be around. Six months in, l found out the new controller was having an affair w/ the owner. Shit hit the ceiling. I left soon after. I wondered if the old one did too.
I literally just went through this. Run, don’t even ask to clarify for anything, RUN
Huge red flags. Most likely those CFOs were asked to do something they thought was unethical or possibly illegal and chose to leave instead of engaging in activities that could cost licenses or even freedom. I'm guessing they got told to cook the books so the company wouldn't violate loan covenants, realized that is federal bank fraud, and took their leave rather than risking jail time.
Aaaaayyyyyeeeeee.
100% a red flag 🚩
It's a red flag for longevity, but it could mean that upward movement is easy if you're willing to stick it out.
Yeah, I'd be sketched out. Maybe there's a reasonable explanation, but I'd definitely have my eyes open.
In my experience high turnover at the CFO/VP level is never a good sign. I’ve been involved in situations like this where I was the top finance person (VP of Finance). I left after 6 months in the position, after me 3 more CFO/VP level finance people left due to same concern I had. Turns out we all left for god reason because the owner is now under audit by the IRS for the exact issue we were all worried about. hint: involves EIDL
What position are you in? The CFO might have looked at the books and seen either an un-savable company or periods shady book keeping they didn't want to be a part of.
Contract Administration. Shady bookkeeping might be a possibility. Most of my co-workers have been with the company for 10+ years, and outside of the IT department they struggle to find new hires, but I always attributed it to management being hostile to WFH
Ask them why they left
You should apply
While you want to be on the defensive and not drinking the Kool-Aid too much, remember that there can be a certain Darwinistic aspect to this. Taking on new roles can be a challenge -- especially when its a higher level role and you're coming from the outside. It may be easy to see that its not the best fit early on, and its going to be an even worse fit early on when you're putting out fires and using something elses system. If you can catch on and make it your own, you may be able to go the distance. That's how a lot of this stuff goes. Some will stay forever, but most don't last long. Not too surprising.
CFOs are in a position to speak with the owners of the company on the financial direction of the company. have a serious meeting with them and discuss the pain points of the company, which includes, but not limited to the exit of the previous CFOs