May 25, 2022

What is the role of public accounting?

What is the role of public accounting? 

Public accountants provide services to a variety of clients that include individual taxpayers, large corporations, government agencies, nonprofits, and educational institutions.

 The services performed by public accountants generally fall into three categories :

• Accounting and auditing services that involve keeping financial records and preparing and reviewing financial statements for use by investors and offshore banks.
• Tax services that include preparing tax returns as well as advising clients on tax deductions, tax planning and other tax-related issues.
• Consulting services, which can include financial planning services for individuals as well as business advisory services to assist management in the design, development and implementation of accounting systems and employee compensation packages.

External audit and documentation

The primary function of public accountants and public accounting firms is to perform external audits of balance sheets, income statements, quarterly reports, and earnings reports.

Public accountants must evaluate their clients' financial statements against GAAS (Generally Accepted Auditing Standards) and ensure that the statements are prepared in accordance with generally accepted accounting principles (GAAP).

The use of the word "public" in the term public accounting highlights the importance of the services these professionals provide to the general public when conducting external audits.

Investors and consumers rely on the accuracy of accounting information when assessing companies' financial health, and when making decisions about what to do with their finances.

 The integrity of the financial system as a whole depends to a large extent on the ability of working accountants to efficiently perform external audits.

External audit services provided by public accounting firms are essential to providing the investment community with an accurate picture of the financial viability of publicly traded companies.

These companies issue quarterly and annual reports to inform the public of their financial position and prospects, and investors use the information in these reports to make decisions about which stocks to buy and sell.

When public accountants audit these reports, they check the actual data used to create financial claims submitted by companies for accuracy.

 The audit and certification of a public accountant imparts an element of

trustworthiness to a company's financial reports.

General Accounting Principles

General Accounting Principles in general are the rules that public accountants must adhere to when preparing financial statements, and these standards were formulated by the Financial Accounting Standards Board (FASB), a not-for-profit organization created by and accountants to issue these Principles, as well as to amend them according to the need.

The use of these standardized standards allows investors, shareholders, banks, regulators, and financial analysts to understand and analyze financial data more efficiently.

The use of standardized standards in preparing the financial statements also allows for easy comparison with the companies that issue them.

What is the role of the accountant?

A general accountant works in a public accounting firm that performs audit, tax, consulting, and accounting services for other companies, organizations, or individuals, although job duties vary by specialty, such as tax accounting or forensic accounting, but some common duties include checking the accuracy of financial documents, working With budgets, financial advice.

A bachelor's degree related to accounting is required for most jobs, while a master's degree is preferred in this field, and many professionals also go on to earn the Certified Public Accountant (CPA) franchise