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What is Accountant Responsibility?
Accounting Responsibility means that an accountant work should understand and follow his/her duties of documenting accounting information so as to ensure that public trust and interest of all the related stakeholders are preserved. The accountant is the person who works in various areas of finance functions like accounts payable, accounts receivable, payroll, treasury, preparation of financial statements, etc. of an organization and also practices as certifies public accountant. An accountant plays a diversified role in audit, project reporting, valuation, and people rely on their work so let’s understand the responsibilities of an accountant from the point of view of various work they do –
Components of the Accountant’s Responsibility
#1 – Accounting
In accounting, if there is any journal posted or invoice booked in the system, it should be reviewed by the accountant and ensure that the invoice is not booked earlier or from an unknown Supplier. While closing the books for the month, accrual should be made for invoices due but not received and prepaid should be released.
Many times the job involves estimation while making provision for any expense or revenue item, here accountant must be clear in taking the basis for estimation and should be a bit conservative in approach. Also at a time when unsure of an item, whether to capitalize or expense, one should follow accounting standards and other guiding notes to arrive at a rationale.
#2 – Auditing
The audit is the one thing at which the public, banks, investors and other related parties trust that the financial statements are presenting a true and fair view. It is saying the auditor is a watchdog and not a bloodhound. With so many recent accounting scandals like Tyco, Enron, WorldCom, etc.
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The SOX was formed, and auditors were asked to go deep into the books. As an account, while working as an auditor one should never skip any step of the audit process. They must follow all the steps, take reasonable samples, question any ambiguities, ask the higher management for consent in writing where required and do all the reasonable check to ensure that books look good. They should release the audit report only after being satisfied with the validity and accuracy of numbers in financial statements.
#3 – Certified Public Accountant
Accountants working as CPA do so many tasks like return filing, valuation, project reporting, forensic accounting, etc. These reports are used by people to apply for loans, mortgage, credit card, cash credit, and other financial needs. While certifying these documents, the accountant must look at original papers, the last few years reports, other affecting factors and then only he/she should sign the reports.
#4 – Digital Environment
The digital world today poses a new challenge at accountant task and it is their duty to be equipped with the skillset needed to work through a computerized environment. The system development and system audit demand and accountant not only have the accounting skill set but also to possess a certain degree of technical knowledge that how accounting is done in the digital world.
The accountant must learn how to use test data in the computer and follow it from start the start to a point where an accountant can see how it impacts the Profit & Loss and Balance Sheet. The digital world today is an ever-changing scape and the emerging cyber crimes and thefts pose a new set of challenges on accountants and need them to be prepared and responsible for challenges thrown at them.
#5 – Moral Responsibility
An accountant is not only responsible to be equipped with the skillset of accounting and digitization, but they also have a moral responsibility towards society, regulatory authorities, country, and all the related stakeholders. Accountants are also called the watchman of economy and treasure and it is a huge compliment that comes with a high level of obligation and moral responsibility.
They should never indulge in any malpractice, file any false report, submit any unreasonable project report or involve in any systematic financial fraud. As an accountant, many a time they have to use their judgment and it should be free from any bias must never be influenced by any higher authority or any person. The accountant must always work ethically and with the highest degree of professionalism and must never let down the accounting profession by using any unethical or illegal means while performing their duties.
Advantages of Accountant Responsibility followed Ethically and Diligently
- Financial statements represent the true and fair view of the financial status of the entity
- Audit facilitation becomes easy
- Tax filing and other statutory compliance becomes easier
- Improves public faith and investors trust which is good for business
- Improves Goodwill in the long run
- Improved relationship with banks makes it easy for financing activities
Disadvantages of Accountant Responsibility not followed Ethically and Diligently
- If the bookkeeping and records are not kept systematically, the audit process becomes difficult and auditors may qualify the audit report
- One bad misconduct or scam can take the even a legend organization down badly towards bankruptcy
- If the accountant is not following processes in place, it also points out loopholes in internal controls
- Loss of Goodwill and business
Points to Note
In today’s globalization and increasing compliance requirement the responsibility and duties of an accountant changes with each amendment. It is his/her duty to keep themselves updated with all the recent changes, new updates and prepare themselves accordingly. With the introduction of IFRS globally there is going to a massive change in the accounting systems and also the way accounting is done in many countries. Now a global accountant has to keep pace with all these changes and ensure that implementation is smooth, and the organization is IFRS ready.
Accounting is a fine and noble profession and it has been in place for quite some time now. Accountants are regarded as one of the finest and they are one of the highest-paid professionals. With so much respect and money come the responsibility of moral obligation and ethical requirement to keep things simple and straight and not let down any related party who has trusted accountant work.
This has been a guide to what is Accountant Responsibility? Here we discuss the top 5 responsibilities of an accountant including accounting, auditing, CPA, digital and moral responsibility along with advantages and disadvantages. You can learn more about accounting from the following articles –