Role of Accountants

Role of Accountants in Modern Business Organization:

Accounting is an age-old profession. In old days of accounting, the main function of an accountant was to maintain the records of the business. However over the years, the role of an accountant has undergone a sea change. With the inception of joint stock company form of an organization, the profession of accountancy has come to be recognized as one of the lucrative professions. Accountants can be broadly divided into two categories namely, Accountants in public practice and Accountants in employment. Accountants in public practice (practicing chartered accountants) are members of the Institutes of Chartered Accountants of India. The accountant renders valuable service to the society in the following manner:

1. Writing up Accounts for Preparing Financial Statements: Professional accountants offer services for writing up accounts and preparing financial statements. By maintaining proper books of accounts and records he assists management to a great extent in the field of planning, decision-making and controlling. A systematic record also enables the business to compare one year’s results with those of other years.
2. Audit of Accounts: Conducting of audit is one of the most important functions of a professional accountant where his specialized training, skills and judgement are most often called into play. Audit satisfies the users of financial statements that the accounting information contained in these statements is true and reliable and that accounts have been prepared in accordance with the accounting standards. It, thus, adds credibility to financial statements prepared by the business. He also points out the shortcoming and suggests ways to overcome them.
3. Role as Management Accountant: A management accountant helps the management in planning and control of organizational activities and their performance evaluation.
4. Help to government, Revenue Department and Tax Payer: Chartered accountant plays an important role in ensuring that the Government gets its proper share of taxes and at the same time the tax payer is not exploited. Chartered accountant is instrumental in preparing the financial statements of the enterprise. He also prepares the returns for tax purposes. He also appears before the tax authorities on behalf of the taxpayer. He also does the work of certification of documents in many cases.
5. Role as Cost Accountant: As a cost accountant, he maintains the costing records and ascertains the cost of product or service. He provides costing information introduces cost control and cost reduction methods and assists the management in fixing appropriate selling prices.
6. Role in Merger, Liquidation, etc: The services or advice of chartered accountants are frequently sought in the formation, merger or liquidation of limited companies. They are called upon to undertake investigation for achieving greater efficiency in management and find out the reasons for increase of decrease in profits. They act as executors and trustees under a will or trust deed to carry out the administration of the estate or settlements.

Role of Finance Manager

Finance is the life blood of business. Procuring financial resources and their judicious utilization are the two important activities of financial management which is a specialized function. The finance manager has to strike a balance between the current needs of the enterprise for cash and the needs of the shareholders for adequate return. The financial management of a large company is usually the responsibility of the finance director who may be in place of or in addition to the controller. Often finance manager and controller are inter-changeable terms and only one of these two positions may be found in a company. The finance manager is also concerned with implementing the financial policy of the board of directors, managing liquidity, preparation of budgets, administration of budgetary control system, managing profitability, etc.