In movies and the media we only really see the bad side of what accountants do, they hide money for, and sometimes from their employers. Pull out unbelievable amounts of money form some mysterious Swiss bank account. And is often the one guy who, if taken-in by the authorities, will be able to bring down a large criminal enterprise. But what do accountants really do? Why are they so essential to organizations? And why do they have power over all that money. In this article we will explain the duties of accountants and what their true purpose is.
So what are accountants? In a nutshell, an accountant is the person who handles the financial records of an individual or company, not necessarily handling or having access to these accounts. Their main duty is to keep track of where the money is going, though sometimes they can arrange things to make it look like money hasn’t disappeared and have gone through proper channels, this and other illegal activities regarding accounts of a company or individual is often known as “cooking the books”. Though illegal, many mistakenly believe that this is the accountant’s primary purpose. This is completely untrue, the responsibility of an accountant are the following.
1.) Prepare Profit/Loss Statements
This is to notify their employer if they are making or losing money. Their duty is to make sure that the company and individual can make sound financial decisions, by giving them the raw data where they can see the financial condition of their company or household.
2.) Look for Errors and Anomalies
This is where they have a lot of power, one of their duties is to report errors in the accounting and anything anomalous, sometimes caused by the sheer carelessness of someone in the company and sometimes on purpose. With so much money moving around in a company, it can become very tempting to take some, if a team of individuals along with the accountant (It would difficult for him to do it alone) would like to do so, a few record changes here and there can often cover their tracks.
3.) Analyze P/L Reports and Statements
Accountants have a lot of power over the decision of companies to pursue an investment or project. They are often tasked to reviewing the profitability of said investments and projects, if they deem it profitable and/or financially feasible, their opinion and conclusions can play a deciding role in a company’s decision.]
4.) Create and Improve Accounting procedures
Sometimes money can slowly disappear from the accounts because of loopholes in the system, loses from these are often negligible at first but catastrophic in the end. Accountants are tasked to create these accounting procedures, so they have the power to make those small cracks or seal them.
So in conclusion, those accountant scenes in movies are not far off, but obviously exaggerated. Though it is clear that accountants have a lot of power when it comes to financial records, so if you are accountant, remember that with great power comes great responsibility. And to people who are not accountants, don’t piss them off.