We’re opening a new year to discuss Chapter 2 of the book MBA in a Nutshell. As it turns out the accounting and finance section of most MBA sections are structured very differently from the CFA syllabus. CFA charter-holders assess an investment as an outsider looking in whereas MBAs use their knowledge to manage a company from an insider’s perspective. The author also disclaims that the book focuses on the managerial aspects of accounting and not the financial aspects of accounting that focuses more on compliance.

The chapter opens with the most important tasks performed by Chief Financial Officers or CFOs – Risk Management. As it turns out, doing risk management for a company is a complicated task requiring the support of a multidisciplinary workforce.

Risk Management covers the following :

a) Business Partners – How dependent is the company on them ? This requires knowledge on legal aspects of the relationship as