Accountants are hired by majority of businesses to provide the appropriate accounting needs. Most business hire accountants based on the professional’s services rendered, personality, reputation or status in the industry, and costs to be paid. Another factor taken into account is the company’s size of business since larger companies have vast accounting needs as compared to smaller ones. Superior businesses even hire accountants from prominent accounting firms.
Some businesses do not avail of professional accounting services since they can already handle the size of accounting work required. However, most companies opt to hire an accountant to ease their burden in handling the entire organization. Accountants can help managers in complying with relevant laws and regulations without further the former’s thorough direction so that other aspects of the business can be strategized well.
Accountants are professionals practicing accounting and auditing procedures. Their primary roles are to measure, disclose, or provide assurance regarding financial information in order to assist in the decision making for business managers, tax and other authorities, investors, and other stakeholders in the company’s allocation of resources.
Accountants operate in the field of commerce and industry. Accountants are typically employed in accounting firms. They can also work for large companies’ department of internal accounting. In addition, they could likewise venture into private individual practice.
The Generally Accepted Accounting Principles (GAAP) is the guiding principles and ethical standards that govern accountants. International Financial Reporting Standards (IFRS) are also significant guidelines. These standards vary for each state or region.
The liability insurance specifically created for accountant’s doing professional work is called the Accountant’s Professional Liability Insurance. This type of insurance protects them from lawsuits in line with professional accounting undertakings. It provides coverage even for higher risk activities by way of endorsement, such as SEC activities and several investment services. Intentional acts, fraud, property damages, bodily injury, and criminal acts are the charges not covered by this insurance.
For example, the accountant behind the making of a financial statement that is later discovered to be misleading and is not in compliance with GAAP can be held liable for legal charges. The moment this happens, the accountant’s professional liability insurance will cover the accompanying litigation costs.
The statement made by the accountant which describes whether the financial statements of a certain company is presented fairly is called the accountant’s opinion or report. There are four types of opinions to be expressed by accountants. These are unqualified opinion, which signifies that the financial statements are complete, presented fairly and there are no qualifications or exceptions attached thereto; qualified opinion, which denotes a fair presentation but factored by reservations to which the auditor cannot determine; whereas, adverse opinion indicates that the practitioner do not desire to give an assurance as to the company’s financial statements. Litigations pertaining to an insurance company’s key disputed claims can become an aspect in expressing a qualified opinion.
The accountant’s signature must appear in the accountant’s report which must define the state of a company’s financial statements. It as well must take in quality and material information about the company’s financial records and reports.