What is Accountant Responsibility?
Let me explain accountant responsibility directly: it's the ethical duty you, as an accountant, have to everyone who relies on your work. According to the American Institute of Certified Public Accountants (AICPA), you must serve the public interest and maintain the trust people place in our profession. You owe this responsibility to your clients, your company's managers, investors, creditors, and external regulatory bodies. You're accountable for the accuracy of the financial statements you handle, and you need to carry out your tasks in line with all relevant principles, standards, and laws.
Key Takeaways
Here's what you need to grasp about accountant responsibility: it's fundamentally the ethical obligation to those depending on your output. Your specific duties can differ based on the industry and the type of accounting, auditing, or tax work you're doing. No matter what, you must always follow the applicable principles, standards, and laws in your practice.
Understanding Accountant Responsibility
You should know that accountant responsibility adjusts slightly depending on your relationship with the tax filer or business involved. If you're an independent accountant, you often handle confidential details like personal Social Security numbers or business sales figures, and you must uphold accountant-client privilege. You can't share that private personal or business information with competitors or anyone else.
When you work for an accounting firm, you still need to keep information private, but you also have duties to your firm. That means accurately logging your hours and the tasks you've completed. For instance, during an audit, you should only record what you've actually done, not fabricate completions to rush things or inflate your hours.
If you're an in-house accountant for a business, you get access to sensitive info that others in the company don't, such as payroll details or layoff plans, and you have to handle it discreetly. Beyond your responsibility to company employees, you're also accountable to stockholders and creditors. Failing to meet these responsibilities can ripple out, affecting the entire accounting field and even financial markets.
Accountant Responsibility and the Internal Revenue Service
Even though you carry significant responsibility to your clients as an accountant, if the IRS spots an error in a tax return, they don't blame you or the preparer—they correct it and hold the taxpayer accountable for extra taxes, fees, and penalties. That said, if a client suffers from your misconduct, they can sue you for negligence, claiming you breached your duty and caused them personal or financial harm.
The IRS does take fraud seriously, and you can report problematic tax preparers using Form 14157, Complaint: Tax Return Preparer. If you're an in-house accountant who manipulates books or inserts false data in tax returns or accounting docs, you're liable for that misconduct and could face criminal charges.
Accountant Responsibility and External Audits
According to the Public Company Accounting Oversight Board (PCAOB), if you're performing external audits, your responsibility is to gain reasonable assurance that the client's financial statements lack material misstatements, whether from errors or fraud. The Sarbanes-Oxley Act of 2002 (SOX) introduced additional duties around fraud detection. Now, you must certify that the client's internal controls are sufficient, on top of opining on the financial statements.
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