Role of Accountant in the Society (Commerce Achiever)

Role of Accountant 

Accounting is both a science as well as an art. A person performing functions like recording, classifying and summarizing data to generate useful information like profit and loss for the period of an organization is known as an accountant.

Knowledge, skills, and experience of accountant play an important role in the growth of an organization. Role of Accountant is very important in every organization. Some of the major areas where the role of an accountant is important are as below:

There are many functions which an accountant performs. Some of them are:

1.Maintenance of books of accounts

Role of Accountant is very crucial in maintaining systematic records of financial transactions in order to calculate the net profit or loss for an accounting period and the financial position of an entity as on a particular date.

Maintaining proper books of accounts in the manner required by law and accounting policies followed by the entity is important for the entity. The books of accounts of the entity also support the future planning of business operations.

2. Statutory Audit

Usually, a Chartered Accountant audits the books of the entities like Limited companies, firms etc. according to the law. He ensures that the entities prepare the financial statements in accordance with generally accepted accounting principles, standards and legal considerations. He also ensures that the financial statements show a true and fair view of the financial position of an entity.

3. Internal Audit

Accountants, internal staff are engaged in an internal audit by large-sized entities (like listed companies, companies required to conduct an internal audit under any law etc.) to ensure that all the accounting transactions related to respective accounting year are recorded, classified and summarized in accordance with the accounting policies followed by the entity. It also enables management to check whether all the instructions given by it is followed or not.

4. Budgeting

Budgeting refers to the planning of various business activities, transactions before their occurrence. Accountants and management prepare various plans to balance their business incomes and expenses.

Actual results are compared with the budgeted to find out the variation if any. Role of accounting is very important while preparing the budget.

5. Taxation

Another very important role of the accountant is to plan the tax liabilities of an entity. Accountants are capable to manage the tax matters of an entity, file returns, make representations before tax authorities, and settle the tax liabilities of an entity under various laws. Various tax planning advice, investments etc services can be provided by accountants.

6. Investigation

The accountants also carry an investigation to ascertain the financial position of some parties. They perform this function either by themselves or by hiring external professionals.

However, external professionals are more preferable than the internal staff due to their independence, which enhances the confidentiality of investigation report.

7. Management advisory services

Reporting internal controls to management, long-term plans, advisory regarding the business operation of an entity are the major responsibilities of an accountant.

An accountant also provides the management consultancy services in the areas of Management informationsm system, expenditure control and evaluation of appraisal techniques.

8. Other Activities

The accountant also performs activities such as acting as a liquidator, cost accountant, arbitrator for settlement of disputes etc. Thus, these activities make the role of accountants important.