Over the course of time, it can be seen that the role of accountants has magnified to an utmost extent. This is primarily fueled by the increasing need of the hour to facilitate awareness on the part of stakeholders, to ensure that there are no stones unturned in this aspect.
With cases like Enron and other financial frauds leading to massive public losses, organizations across the globe have vowed to change this for the better, by redefining the role of accountants and establishing clarity regarding the ground they need to cover in order to ensure that they are able to add value to organizations, and stakeholders, at large.
Key Roles and Responsibilities of Accountants
In this aspect, it can be seen that key roles and responsibilities of accountants can broadly be categorized into two broad categories: internal and external.
As far as internal responsibilities are concerned, they refer to the role of accountants that ‘internally’ impacts the organization whereas the ‘external’ aspect mainly focuses on the responsibility of accountants towards external stakeholders.
Internal Responsibilities of Accountants mainly include the following:
- Ensuring that there are no inconsistencies in the record keeping within the organization. All records are supposed to be kept and maintained in an orderly fashion, in order to ensure that the respective receipts can be presented when required.
- Preparation of books, and relevant journal entries in order to systematically present the records that have been kept. This might also include using software like SAP, or other ERP related issues.
- Preparation of Financial Statements: This tends to be one of the most important role of the accountant. At every year-end, they are supposed to prepare financial statements in order to be presented to the stakeholders. This is perhaps the fundamental parameter related to accountants.
- Faithful representation of accounting records: This is something that goes beyond the scope of the preparation part of the financial statements. As a matter of fact, it can be seen that accountants are supposed to ensure that they do not understate or overstate any part of the financial statements. They are supposed to ensure that all the relevant information is included in the financial statements.
- Preparation and Filing Tax Returns: Taxation tends to be another important aspect within the organization. Accountants are supposed to ensure that they are able to prepare all the tax returns in order to facilitate proper management of resources. Therefore, they are supposed to have an understanding of taxation, so that they can file returns accurately.
- Acting as an Aid in decision making: Managerial Accounting is also a crucially important aspect of accountant. They are supposed to help the management take decisions, based on calculations, and other respective criteria in this aspect.
- Helping auditors in the Annual Audit: Annual Audit is perhaps the most important highlight of the organization. Accountants in this aspect should ensure that auditors have all the resources in terms of facilitating the audit process. This includes providing all the resources that are necessary for the auditors to reach a concrete decision in terms of audit process, so that they can conclusively decide based on the supporting evidence.
Speaking of external responsibilities of accountants, it is imperative that they are supposed to report any uncertain activity to the relevant parties. In case of management pressurizing in unfaithful representation of the financial statements, they are supposed to disclose that, keeping in mind the larger stakeholder interest in this regard.
Therefore, accountants are supposed to work for the larger organizational context, to be able to decide on a strategy that can help them make decisions in a proper manner. They prepare financial statements for the external parties involved, and hence, should include anything that acts as an aid for the external parties.
They key roles and responsibilities of accountants are important to understand the expectation existing with general businesses, and their ability to create a proper strategy regarding the overall state of affairs. It is imperative that there is proper clarity regarding the functions they have to perform within the organizations they are a part of, in order for them to be able to ensure proper clarity regarding the roles and objectives they need to fulfill.
These responsibilities eventually reflect the performance of the company to the external stakeholders, because of which it is important for organizations to maintain a zero tolerance policy towards accountants being unable to achieve the respective goals and objectives.