The Accounting Profession-role and activities of an accountant || The Conceptual Foundation of Accounting || Bcis Notes

The Accounting Profession-role and activities of an accountant || The Conceptual Foundation of Accounting

The Accounting Profession-role and activities of an accountant

In this modern competitive world, accounting has emerged as a powerful tool. The accounting profession is not limited to ascertaining the operating result or financial condition of a business only. The accounting profession goes beyond this. They are mentioned below:

The Accounting Profession-role and activities of an accountant || The Conceptual Foundation of Accounting || Bcis Notes

Public Accounting

Accounting firms engaged in public accounting provide a variety of accounting services to the public against a certain change. They vary in size from large national or international accounting firms employing thousands of persons to numerous one-person practices which operate on a regional or local basis.

Functions of Public Accounting

The prime functions of public accounting are mentioned below,

  1. Auditing
  2. Tax services
  3. Management advisory services
  4. Small business services

Auditing: It involves the examination of financial statements and generally forms an important part of the work of a practicing chartered accountant. All limited companies must have their financial statements audited by an outside chartered accountant.  The major duties of a company auditor are

  • Examine and verify the company’s financial statements
  • Appraise the company’s procedures for collecting, recording, and reporting financial information
  • Test the  controls by which the company protects its financial systems from frauds and errors
  • Publish an independent professional opinion as to whether the company’s financial statements give a true and fair view of its financial affairs.

Tax Services: Business enterprises have to consider the tax consequences of alternative courses of action as a part of the decision-making. Tax services include not only the preparation of tax returns and compliance with tax laws but also the planning of business activities with a view to minimizing taxes.

Management advisory services: These days an important part of the revenues of large accounting firms is earned from providing management advisory services, an omnibus term for a wide variety of consulting activities. These services go beyond the traditional boundaries of accounting and auditing.

Small business services: Many accounting firms provide a variety of services for small businesses. Setting up an accounting system, compiling financial statements, preparing a budget and forecasts, and assisting the client in obtaining a bank loan are examples of small business services.

Private Accounting

An accountant is said to be a private account when he is employed by a business enterprise. Private accountants are employed by organizations in such diverse businesses as steel-making, manganese mining, banking, airlines, hydropower, and hotels. Typical designations of these accountants are financial vice president, financial controller, works accountant, and management accountant.

Government Accounting

Government departments and agencies receive and pay huge sums of money. Unlike business enterprises, the objective of the government is not to make a profit from its operations. Efficient and proper handling of revenues and expenses requires extensive systems for hacking and recording millions of documents and prepared numerous financial reports for internal use and for parliament. The Comptroller and Auditor General of Nepal, an independent constitutional functionary, audit the transactions and programs of the government.

Non-For-Profit Accounting

Colleges, schools, hospitals, charities, and religious institutions are established for the purpose of providing certain types of services to the general public. Unlike business enterprises, these organizations are not profit-oriented. These need financial reports for assuring present and potential donors that funds are utilized efficiently and effectively for the stated purposes.

Accounting in Education

Accounting is used not only in preparing reports but it is also used in producing accountants. As the business organization has been growing the demand of high qualities accountants has also been increased. Thus, schools, colleges, universities, and any other educational institutions are involving to teach and train the people to prepare qualified accountants. Such institutions are also involved in accounting research.

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