What is responsibility?
Accountability is when an individual or service is held responsible for the performance of a specific function. Essentially, they are responsible for the proper performance of a particular task, even if they are not the ones performing the task. Other parties rely on the task at hand, and the responsible party is the one whose head will roll if the action is not performed. Responsibility is common in the financial world and in the business world as a whole.
There are several examples of accountability in action. With regard to accounting jobs, an auditor who examines a company’s financial statements is responsible and legally responsible for any anomalies or cases of fraud. Liability obliges an accountant to be careful and knowledgeable in his professional practices, because even negligence can lead to legal liability.
Accountability is essential in the financial sector. Without controls, balances and liability in the form of consequences, the integrity of the capital markets could not be maintained. There are compliance departments, accountants and a whole bunch of other professionals working to make sure companies report their revenues correctly, that transactions are executed on time and that the information provided to investors is timely, informative. and fair. If any of these things do not happen, ideally, faults will be awarded and penalties will be paid. Some things can’t go wrong. If they do, a responsible party pays for it. This is the definition of responsibility.
Examples of responsibility
For example, an accountant is responsible for the integrity and accuracy of the financial statements, even if they have made no errors. The managers of a company can try to manipulate the financial statements of their company without the knowledge of the accountant. Managers are clearly encouraged to do so, since their remuneration is generally linked to the performance of the company. This is why independent external accountants must audit the financial statements, and responsibility requires them to be careful and knowledgeable in their review. Public companies are also required to have an audit committee that is part of their board of directors and composed of outside persons with accounting knowledge. Their job is to oversee the audit.