Skip to content

CFO Survey


No Consensus on International vs. U.S. Accounting Standards

Energy Conservation Moves to Front Burner 

CFOs State Their Choice for Next U.S. President

FLORHAM PARK, N.J. and NEW YORK, N.Y. June 27, 2007 – American companies are forecasting single-digit percentage increases in capital spending, hiring, and the prices of their products over the next 12 months, according to a recent survey of CFOs conducted by Financial Executives International (FEI) and Baruch College’s Zicklin School of Business. However, these expected increases are trending downward from earlier forecasts.

In the 2007 second quarter “CFO Outlook Survey,” the weighted expected increases for the next year average 2.3 percent for capital spending, 4.1 percent for hiring, and 1.9 percent for product prices. These anticipated increases are lower than the CFOs had forecast in earlier quarterly surveys. In the first quarter, the predicted averages were 7.9 percent, 5.2 percent, and 2.1 percent, respectively. The only area that saw an increase from the last quarter was technology spending, which rose from 9.6 percent to 11.3 percent.

“The CFOs’ forecast of price increases of less than 2 percent during the coming 12 months represents a relatively benign inflation environment,” said John Elliott, dean of the Zicklin School of Business at Baruch College. Dean Elliott also noted that the weighted average values cited are smaller than the average values (which give equal weighting to responses regardless of company size), suggesting that larger firms expect less capital spending and lower hiring and smaller price increases.

Furthermore, 67 percent of the CFOs indicate they are reducing their rate of inventory growth, and 41 percent are actually shrinking levels. Overall, the CFOs expect a 0.6 percent reduction in inventory levels.

One contradictory inflation signal from the CFOs is that they consider “finding qualified workers” a top business challenge over the next 12 months, second only to general market “competition.”

Their economic optimism decreased slightly from the prior quarter, as did their optimism about their own company.

Accounting Standards Debate
CFOs are almost evenly divided in their views about the use of International Financial Reporting Standards (IFRS) vs. U.S. GAAP. Just over half of the CFOs queried (55 percent) said they would support a proposed change by the SEC that would allow foreign private issuers registered with the commission to choose between IFRS or U.S. GAAP in filing their financial reports. Forty-five percent would not support the change.

The SEC plans to request comments on a proposed change that would allow U.S. issuers the choice of using IFRS or U.S. GAAP. CFOs are also split 50/50 in their views on this change.

"The globalization of the capital markets demands that we create a dialogue about the virtues of GAAP and IFRS," said Michael P. Cangemi, FEI president and CEO. "At this point, U.S. financial executives need to become more familiar with IFRS. It will, at some future point, have an impact on how financial statements are prepared."

In related news, FEI and the European-American Business Council will hold a first-time conference, on Sept. 28 in New York, titled the Global Financial Reporting Convergence Conference, to address the specter of IFRS adoption by U.S. firms. For more information, visit

Companies Respond to Climate Change and Energy Costs
Sixty-one percent of the companies surveyed have changed manufacturing or other policies to conserve energy. Some are examining solar and wind energy, solar reflective installations, and conversion to steam heat created by burning their own wood waste. Others have improved electric motors and equipment cooling technology and reduced packaging waste.

Further, one-third of the companies have discussed or addressed the long-term implications of climate change, or global warming. The most common immediate goals are creating environmentally friendly office space and new products.

CFOs Cast Straw Votes for New U.S. President
If the U.S. presidential election were being held today, American CFOs would vote in a Republican candidate, with Rudy Giuliani, former mayor of New York City, and Fred Thompson, former senator from Tennessee, the front runners. Mitt Romney, former governor of Massachusetts, and John McCain, senator from Arizona, were the third and fourth most popular choices. Hillary Clinton, senator from New York and the CFOs’ most popular Democratic candidate, received 6 percent of the votes.

About the Survey
Full survey results are available at or from Andrew Healy at

This quarter, the CFO Outlook Survey, conducted by Financial Executives International and Baruch College’s Zicklin School of Business, interviewed 157 corporate CFOs electronically the week of June 11. CFOs from both public and private companies and from a broad range of industries, revenues, and geographic areas, including some off-shore companies, are represented. Survey respondents are members of Financial Executives International.

Revenue-weighted averages are provided for projected changes in capital spending, technology spending, and prices of products. An employee-weighted average is provided for the projected changes in hiring.

FEI has been conducting surveys gauging the country’s economic outlook from the perspective of CFOs for the past nine years.

About FEI
Financial Executives International (FEI) is the leading advocate for the views of corporate financial management. Its 15,000 members hold policy-making positions as chief financial officers, treasurers, and controllers. FEI enhances member professional development through peer networking, career planning services, conferences, publications, and special reports and research. Members participate in the activities of 86 chapters, 75 of which are in the United States and 11 in Canada. For more information about FEI, visit

About Baruch
Baruch College, founded in 1847, is a senior college of the City University of New York. The Zicklin School of Business at Baruch College is the largest and most diverse AACSB-accredited collegiate school of business in the nation. Baruch has a long tradition of producing accounting and finance graduates who become leaders as CPAs and CFOs.