written by | August 10, 2022

Who is an Accountant? Definition, Roles and Responsibilities

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Table of Content


Accounting is a profession which involves recording and analysing financial transactions. It is a wide field, and various responsibilities go with it. As the name indicates, accountants help maintain organisations' financial accounts. 

An accountant is trained and skilled in the field of accounting. Generally, all accountants have post-secondary education with knowledge and understanding of financial statements. They can also be classified into public and management accountants.

Accountants' presence in organisations is essential as they play a vital role in running a business smoothly. They help determine the capital, financial resources and even manufacturing costs of a product. They also assist companies with planning, budgeting, auditing, reporting and controlling expenses. In this article, we will look at what accountants do for businesses and the key roles and responsibilities of an accountant.

Did you know? The word “accountant” is derived from the French word ‘compter’.

What is an Accountant? 

An accountant is a professional who deals with the financial aspects of an organisation or an individual. Accountants assist companies and individuals in recording, maintaining and reporting financial data. They are also involved in maintaining the private and public companies' financial records by complying with the laws. 

Accountants are often responsible for preparing financial statements to determine a company's financial standing. They also deal with issues such as cash flows, investments and taxation. 

With the use of computers and the advancement of technology, accounting practices have changed, and accountants now use software applications to do their work.

Also Read: Understanding the Limitations of Accounting in Detail | Khatabook

Roles and Responsibilities of an Accountant

An accountant maintains and keeps a record of an organisation's financial resources and activities. Accountants play crucial roles in organisations with varying tasks as per their specialised skills and technical abilities. An accountant's roles and responsibilities vary based on the business’s type and size. The various roles and responsibilities of an accountant include:

  • Maintenance of Accounting Records

Accountants play a critical role in ensuring the systematic records of financial transactions. They track every transaction to calculate the entity's net profit or loss and its position at the end of a specific financial year. 

  • Preparation of Books

For every limited company and firm whose turnover often exceeds certain limits, there is a need for their financial statements to be audited by Chartered Accountants. These accountants examine the financial statements and other documents to ensure that the companies run their businesses transparently and display a fair view to their stakeholders and other concerned parties. 

Moreover, they also need to ensure that the financial statements prepared by the management follow the accepted accounting principles, guidelines and legal concerns. 

  • Preparation of Budgets

An accountant budgets various transactions of an entity. They are involved in the planning of several tasks of the organisation by devising strategic plans to balance the company's revenue and costs. Thus, they play a key role in budget preparation and formulation.

  • Internal Auditing

Accountants have a significant role to play in public companies, listed companies or any companies whose financial statements are mandatory to be audited by auditors. These auditors are none other than those accountants themselves. 

These auditors ensure that the prepared financial statements have been made in accordance with the standard accounting policies usually adopted and followed by the entity. In addition, because of the audit, the management can find any loopholes in the financial statements. 

  • Taxation

Tax is an integral aspect of every business and is laid on incomes, supply of goods and services. An accountant has a very critical role to play in taxation.

They mainly deal with tax problems, returns filing, and accountability to the tax authorities as per various laws and regulations. The accountants can advise on tax planning, investments and other financial services. 

  • Conducting Investigations

An accountant also has the capacity to conduct investigations with respect to certain parties and determine the financial standing at a particular point in time. 

However, for the authenticity and confidentiality of the investigation report, external specialists are more preferred over internal workers. 

  • Advisory Services for Management 

Another major role of an accountant is to advise the management regarding the internal control reports, advisory services of a business operation, long-term management plans, etc. In addition, an accountant provides other consulting services like management of information systems, cost control and assessment appraisal techniques

  • Multiple Roles as an Accountant

An accountant’s roles and responsibilities are to perform tasks like cost accountant, liquidator, and arbitrator in the case of dispute settlement. Thus, their roles range not only from finances and businesses but also to other related aspects that help maintain a stable position in the business environment. 

  • Safekeeping of Financial Data

Accountants also help in safekeeping the financial data of the company into proper systems for better information management. This will guarantee that the company's financial status is kept intact with a proper functioning system. 

  • Advisory Related to Accounting Software

Professionals dealing with accounting software are trained both in accounting and software skills. They know what works best for the accurate preparation and presentation of financial reports. 

The recommendations from an accounting expert will help entities install the required software into their systems to fit the nature of their businesses. Also, such software would help in gathering and safekeeping any financial data.

Accountants are essential to a business as they help companies or individuals manage and analyse their financial records. Accountants perform audits and know central and state tax codes, business laws and standards and accounting procedures. 

The profession of an accountant is highly regulated, and accountants must pass several exams to become certified. There is no end to how many different responsibilities a professional accountant can perform in any organisation. 

Also Read: What is Management Accounting? Learn Definition, Importance, Objectives

Differences Between an Accountant and an Auditor

Accounting is a very important aspect of a business but is often confused with auditing. Accountants and auditors play an important role in the accounting industry. Accounting and auditing both ensure that the business is compliant with the norms and regulations, but there are many differences between them. Here are some of the major differences between an accountant and an auditor:

Points of Difference

Accountant 

Auditor

Financial Records

An accountant looks at the financial records of the company to help with finances.

An auditor looks at a company’s financial records to check that everything is according to rules and regulations.

Financial Statements

They compile and present information through financial statements.

They check and ensure that the financial records are correct and prepared as per rules and regulations.

Regularity

They are mostly concerned with the financial tasks that occur during the period.

Auditors’ task is to assure and assist in meeting the compliance standards.

Area of Expertise

They have a working knowledge of tax laws.

They are trained to go through businesses' financial records and check them to ensure everything adds up.

Skills

They are highly skilled at keeping records of money coming in and going out, paying bills and collecting payments.

They look at the way businesses operate to ensure that they're operating efficiently and ethically.

Type of Employment

They are employed by a company or an individual to compile and maintain records of financial transactions.

They are hired by a company's board of directors to test the accounting records of a company to ensure the accuracy of the financial statements.

Place of Work

Accountants carry out their roles and responsibilities through their own offices.

Auditors don’t have a permanent space to carry out their operations.

Requirement

Accountants are mandatory to maintain the financial records in every type of company.

The role of an auditor is essential in the case of large public and private companies.

Accountants and auditors are both responsible for the financial health of the business they work for, but the way they do their job is quite different. Accountants and auditors have a number of similarities, yet they are distinct in their roles and responsibilities.

Also Read: What are Expenses in Accounting? Meaning & Types of Expenses in Accounting

Conclusion:

Accounting includes the recording, preparation, analysis and communication of financial information about financial entities such as businesses and corporations. Accountants work in a range of fields, including industry, finance, government, non-profit, education and private businesses. They are also employed in large corporations in various positions.

The field of accounting is a unique one, and it is highly detailed and specific in its duties. An accountant has many different roles, including auditing, financial management and tax preparation. Accounting is a very useful and rewarding field, and many accountants can find high-paying jobs in various sectors.

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FAQs

Q: Is accounting a good career option?

Ans:

Accountants play a vital part in any company, making this a wonderful opportunity for anyone looking to further their career in finance.

Q: Should I become an accountant?

Ans:

While a career in accounting is always a good decision, in today's economy, it opens up even more doors to new prospects and sectors.

Q: How long does it take to become an accountant?

Ans:

Accounting degrees are typically earned after five years of study and practice.

Q: What are the duties and responsibilities of an accountant?

Ans:

Accountants' tasks range from preparing and reviewing financial statements, performing financial audits and reconciling bank statements and tax computations.

Q: What does an accountant do?

Ans:

An Accountant is responsible for all financial matters of an entity, like maintaining and analysing financial records.

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The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.
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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.