What is Accountant Responsibility?
Accountant responsibility is the ethical responsibility a accountant has to the individuals who depend on their work. According to the American Institute of Certified Public Accountants (AICPA), accountants have a duty to serve the public interest and uphold the public trust in the calling. An accountant has a responsibility to his clients, his company's managers, investors, and creditors, as well as to outside regulatory bodies. Accountants are responsible for the legitimacy of the financial statements they work on, and they must perform their duties following every applicable principle, standards, and laws.
Understanding Accountant Responsibility
Accountant responsibility fluctuates marginally founded on the accountant's relationship with the tax filer or business being referred to. Independent accountants for certain clients see confidential information, ranging from personal Social Security numbers to business sales data, and must notice accountant-client privilege. They can't share private personal or business data with contenders or others.
Accountants who work for accounting firms likewise have a responsibility to keep information private, however they additionally have a responsibility to their firm. In particular, they must precisely follow their hours and tasks completed. For instance, an accountant performing an audit ought to just record things he has actually completed, as opposed to pretending he has completed things he has not in order to speed up the cycle or support his logged hours.
In the event that an accountant turns out straightforwardly for a business, as an in-house accountant, he approaches information numerous others in the company don't, ranging from payroll figures to news about staff cutbacks, and he likewise needs to discretely treat this information. As well as having a responsibility to individuals who work at the company, in-house accountants are likewise responsible to stockholders and creditors. On the off chance that accountants don't uphold their obligations, it can extensively affect the accounting industry and, surprisingly, the financial markets.
Accountant Responsibility and the Internal Revenue Service
In spite of the fact that accountants have a great deal of responsibility to their clients, if the Internal Revenue Service finds a mistake in an individual's tax return, it doesn't hold the tax preparer or accountant responsible. Rather, the IRS changes the return and holds the taxpayer responsible for the extra tax, fees, and punishments. In any case, an individual who has been violated by an accountant's wrongdoing can bring a claim of negligence against the accountant in light of the fact the accountant penetrated his duty to the client and caused personal or financial damages.
The IRS likewise acknowledges complaints about tax return preparers who have committed fraud, and anybody with an issue might present a complaint using Form 14157, Complaint: Tax Return Preparer. In-house accountants who cook the books or deliberately include erroneous data in their company's tax returns or accounting reports are responsible for offense and may even be criminally at risk.
Accountant Responsibility and External Audits
According to the Public Company Accounting Oversight Board (PCAOB), accountants performing outside audits have the responsibility to obtain reasonable assurance about whether the client's financial statements are free of material misquote, whether brought about by mistake or fraud. The Sarbanes-Oxley Act of 2002 (SOX) added new audit liabilities relating to fraud. Outside auditors presently need to confirm that a client's internal controls are adequate as well as expressing an opinion on the financial statements.
- Accountant responsibility is the ethical responsibility an accountant has to the individuals who depend on their work.
- All accountants must perform their duties following every applicable principle, standards, and laws.
- An accountant's responsibility might change depending on the industry and type of accounting, auditing, or tax readiness being performed.