Are Public Companies Required to Have a Principal Accounting Officer?
I was recently asked whether public companies are required, as a technical matter, to have principal accounting officers (PAOs). While PAOs are not strictly required, companies without PAOs should be aware of the result—that the controller will fill that role by default and be considered a Section 16 officer . Certain SEC filings like Form S-3 and Form 10-K require the signature of the company’s PAO or controller. T he PAO is a designation that is often held by a company’s controller or chief financial officer (CFO). Sometimes the PAO designation is held by someone who is not the controller or CFO. But is a PAO technically required? Rule 16a-1 of the Exchange Act is instructive and defines an officer as the “principal accounting officer ( or, if there is no such accounting officer, the controller )” (emphasis added) . Under Rule 16a-1, if a company does not have a PAO, then the controller is deemed to fill that role and is considered a Section 16 officer. It’s possible for the controll...