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Accounting is the foundation of all business. An accountant provides information that is used by management in decision making. In addition, the image of a company is defined by its financial statements. Investors and managers are kept informed by the work product of the accountant when they decide on things like expansion and/or acquisition. A company’s financial statements are examined by banks when they make decisions on lending capital. Accounting is an ancient skill. In the area of the Tigris and Euphrates Rivers, (present day Iraq), archaeologists have discovered cuneiform tablets that served as accounting tools.

Accountants are responsible for activities other than bookkeeping. An accountant may be an essential member of a team deliberating efficacy of mergers and acquisitions, may investigate and implement tax strategies, assist in setting up health care benefit programs, calculate costs and benefits of new technologies and track the financial progress of the company. They are responsible for reports to stockholders.

At a lower accounting level, there is the bookkeeper, who maintains day-to-day records in an office environment. The bookkeeper keeps track of money coming in, money paid out, payroll, tax information, bank statements, company ledgers, company assets and documents like real estate deeds and investment records.

When an outside agency assists in the accounting function it is usually for the purpose of auditing. An accountant inspects the company’s books for accuracy, and examines documents like bank statement to see if they back up the figures in the ledgers. When figures do not match, it is the auditor’s responsibility to discover the reason for the discrepancy. Internal auditors evaluate their company’s financial statements and guard against waste, fraud and inefficiency.

DISCLAIMER: The materials contained on this web site are provided for information only and do not constitute accounting advice. Contact with this web site does not establish an accountant-client relationship.

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