Accountant Responsibility

AAA

DEFINITION of 'Accountant Responsibility'

The ethical responsibility that an accountant has to those who rely on his/her work. An accountant has a responsibility to the company's management, investors, creditors, outside regulatory bodies, and the integrity of the financial markets.

Accountants are responsible for the validity of the financial statements they work on, and must perform their duties in accordance with all applicable principles, standards and laws.

INVESTOPEDIA EXPLAINS 'Accountant Responsibility'

The accountant's responsibility outlines who the accountant is working for. Even though an independent accountant may be hired by a company's management, the responsibility of an accountant is owed to many others as well. The duty to uphold principles, standards and laws of accounting is owed to the companies, stockholders and creditors they account for.

An accountant who does not uphold his responsibilities can have broad effects on the accounting industry and the financial markets by weakening general perception of all involved.

RELATED TERMS
  1. Privileged Communication

    Interaction between two parties in which the law recognizes a ...
  2. Accountant's Liability

    An accountant's legal liability while performing professional ...
  3. Opinion Shopping

    The practice of searching for an outside auditor who will provide ...
  4. Accounting Method

    The method by which income and expenses are reported for taxation ...
  5. Accountant

    A professional person who performs accounting functions such ...
  6. Generally Accepted Accounting Principles ...

    The common set of accounting principles, standards and procedures ...
RELATED FAQS
  1. No results found.
Related Articles
  1. Bonds & Fixed Income

    Accounting Rules Could Roil The Markets

    FAS 142 is an accounting rule that changes the way companies treat goodwill. Be aware of the impact it has on reported earnings to avoid making bad investment decisions.
  2. Personal Finance

    A Look At Accounting Careers

    More than just crunching numbers, this career blends detective work with trouble shooting.
  3. Fundamental Analysis

    Accounting For Differences In Oil And Gas Accounting

    How a company accounts for its expenses affects how its net income and cash flow numbers are reported.
  4. Professionals

    Financial History: The Rise Of Modern Accounting

    Find out how these two have grown hand-in-hand throughout our modern history.
  5. Fundamental Analysis

    The Best 5 Online Accounting Systems For Small Business

    Running a small business can be difficult, but thanks to these online accounting services, taking care of payroll doesn't have to be.
  6. Investing

    Understanding Cost Accounting

    Cost accounting is the method of financially allocating expenses to goods that are manufactured for resale. Cost accounting is also referred to as managerial accounting, because managers use ...
  7. Investing

    What are Prepaid Expenses?

    A prepaid expense is an asset on the balance sheet. Due to accounting principles, expenses are often accrued on the balance sheet and expensed in a later period.
  8. Investing

    What's a Sunk Cost?

    A sunk cost was incurred in the past, is independent of future events and cannot be recouped. Economists teach that sunk costs should not be considered when making a financial decision. Rather, ...
  9. Investing

    What are Fixed Costs?

    Fixed costs are business expenses that do not change as the level of production goes up or down. They are one of two types of business expense, the other being variable costs. Variable costs ...
  10. Fundamental Analysis

    What's the FCCR?

    The fixed charge coverage ratio (FCCR) is an accounting calculation that shows a company’s ability to pay its fixed costs – expenses that generally do not vary with production level. This may ...

You May Also Like

Hot Definitions
  1. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  2. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  3. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  4. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
  5. Investment Grade

    A rating that indicates that a municipal or corporate bond has a relatively low risk of default. Bond rating firms, such ...
  6. Fringe Benefits

    A collection of various benefits provided by an employer, which are exempt from taxation as long as certain conditions are ...
Trading Center