The financial statements prepared through your accounting process will be accurate, enabling you to make better decisions through your business reporting, or they won’t be. If the accounting process is accurate and timely, you’ll have quality information to act on. On the other hand, inaccurate data will result in misleading information.
It’s tough to have confidence in your business reporting if you don’t have confidence in the people performing the work of your accounting process.
Overview
An accountant is a professional who handles the bookkeeping and prepares financial documents like profit-and-loss statements, balance sheets, and more. A certified public accountant (CPA) can perform audits of your books, prepare reports and financial statements for informed decision making and tax purposes as part of running your business.
Certified public accounts are required to abide by ethical standards of GAAP (Generally Accepted Accounting Principles. In the U.S., certification requirements for accountants can vary from state to state. Still, one requirement that is uniform in every state is the passing of the Uniform Certified Public Accountant Examination. This exam is written and graded by the American Institute of Certified Public Accountants.
Because of the trust placed in audited financial statements by investors, financial institutions, and the government, CPAs have a legal responsibility to be honest and to avoid negligence in their duties. Their judgments and work can affect not just an individual but an entire company, including its employees, its board, its investors, and the government. Accountants may be held liable for paying uninsured losses to creditors and investors in the case of a misstatement, negligence, or fraud.
Accountants will either be employed with an accounting firm, a large company with an internal accounting department, or own an independent practice. Those that don’t become certified public accountants are considered non-qualified persons who will work under other accountants or independently to perform the functions of accounting.