Accountant responsibility definition
/What is Accountant Responsibility?
Accountant responsibility is an accountant’s ethical duty to anyone who relies on their work output. These parties include lenders, creditors, investors, regulators, and anyone else who reads the person’s financial reports. A certified public accountant (CPA) is required to uphold the public’s trust in the accounting profession, which means that the person’s work products must be completed in accordance with all applicable rules, regulations, and accounting standards. If accountants do not adhere to these responsibilities, outside parties will have less trust in business organizations, which can impact their ability to obtain funding from the financial markets.
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Accountant Responsibility for the CPA
CPAs have access to the confidential information of their clients, such as payroll records, sales data, and product cost information. Their responsibility to clients is to not disseminate this information to third parties (such as client competitors), maintaining the accountant-client privilege at all times.
In addition, CPAs providing services as auditors have a responsibility to obtain reasonable assurance that there are no material misstatements in a client’s financial statements. For the financial statements of publicly-held clients, this means that auditors must certify that the internal controls of a client are adequate to support the production of accurate financial statements.
Accountant Responsibility for the Internal Accountant
Accountants who work in private industry and for governments also have a responsibility to maintain the confidentiality of the employer information to which they have access. For example, an internal accountant cannot disseminate confidential salary information, and certainly should not leak financial information to the press. In addition, they have a responsibility to report accurate financial information to outside parties, as well as to ensure that the journal entries and other transactions they generate are free from error. In cases where an internal accountant can be proven to have released fraudulent financial reports, that person can be held criminally liable.
Accountant Responsibility for the Tax Accountant
The accountant who prepares taxes for other parties is in a somewhat different situation. The Internal Revenue Service will hold a taxpayer responsible for any errors on a tax return, rather than the accountant who prepared the return. This means that the taxpayer may be assigned fines and penalties, but not the tax accountant. When this happens, the tax accountant is considered to have indirect responsibility, since the taxpayer client can sue the accountant for the recovery of these fines and penalties, on the grounds that the accountant caused the client to incur financial damages.
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