What is an accountant?
An accountant is a professional who performs accounting functions such as audits or analysis of financial statements. This is also known as account analysis. Accountants can be employed by an accounting firm or a large company with an internal accounting department, or they can set up an individual firm. Accountants are certified by national professional associations after meeting specific state requirements, although unskilled people can still work under other accountants or independently.
Accountants must comply with the ethical standards and guiding principles of the region where they practice, such as international financial reporting standards (IFRS) or generally accepted accounting principles (GAAP). The most common accounting designations are the Chartered Internal Auditor (CIA), the Certified Management Accountant (CMA) and the Chartered Accountant (CPA). A certified internal auditor does not need to be licensed to practice, and neither do certified management accountants.
Accountants can have more than one designation and can perform several types of accounting tasks. The type of training and the designation of an individual will determine his professional duties. Accountants have a bachelor’s degree and may need to obtain a certificate, which can take up to a year to obtain depending on the type of certification sought and the state in which these requirements are to be met.
In the United States, certification requirements for accountants may vary from state to state, but a uniform requirement in each state is successful completion of the Uniform Certified Public Accountant exam, a written exam scored by the American Institute of Certified Public Accountants. .
Legal responsibility of accountants
Certified public accounts have a legal responsibility to be honest and to avoid negligence in their duties. CPA’s have a real influence on their clients, and their judgments and work can affect not only an individual but an entire company, including its employees, its board of directors and its investors. Accountants can be held responsible for the payment of uninsured losses to creditors and investors in the event of anomalies, negligence or fraud. Accountants can be held accountable under two different types of law: common law and statutory law. Common law liability includes negligence, fraud and breach of contract, while statutory law includes state or federal securities laws.
The historical importance of accountants
The first professional association of accountants, the American Association of Public Accountants, was established in 1887 and CPA’s were first accredited in 1896. Accounting became an important profession during the industrial revolution. This is largely due to the increasing complexity of the companies and the shareholders and bondholders, who were not necessarily part of the company but were invested financially, wanted to know more about the financial well-being of the companies in which they were invested .
After the Great Depression and the creation of the Securities and Exchange Commission (SEC), all publicly traded companies were required to publish reports written by chartered accountants. This change further increased the need for corporate accountants. Today, accountants remain an ubiquitous and crucial part of any business.