The role of accountants as independent advisors needs to be clearly stated to avoid conflict of roles that characterize business world today. This clarification is necessary as the traditional roles of accountants expand on an exponential manner.
The traditional role of accountants is principally the; collection, collation, preparation, analysis, interpretation and communication of accounting information to relevant user of accounting information in a suitable format. Now, notice that accountants in this case perform the accounting functions of a business.
The above roles of accountants can be statutory or voluntary. A business (especially the small businesses) can choose not to fully utilize the accounting function of the accounting system. A business can however decide to privately engage the service of an accounting as an independent business advisor/ consultant. When this is the case, the roles of the accountant might change depending on the letters of the consulting contract that establishes a legal relationship.
Accountants acting in the capacity of independent advisors can act in the following capacity:
Tax consultant: taxation is a fiscal policy tool that the governments use to control money in an economy. Higher taxes are charged in times of inflation and vice versa. However, it is the duty of companies and individuals to try as much as they could to reduce the amount of tax they pay to the government through a process known as tax planning. Tax planning entails legally taking advantage of loopholes in the tax laws in order to save money in the form of tax savings.
Systems consultant: accounting information system (AIS) is an aspect of accounting that is a subset of management information system (MIS) to take care of informational flows in the accounting system. AIS has become so important in businesses today that businesses quickly collapse without its presence and this makes it necessary for an accountants to be in the company to assist in the design, development, implementation and auditing of AIS.
Business continuity expert: it has been realized that business failures are rooted in lack of or improper business continuity plan in place. It is also discovered that other experts that operates in the field of business and investment continuity do not have the right mix of skills and qualification to help tackle the problems of business failures. This is why accountants are needed as independent business advisors in the area of business contingency plan.
E-commerce consultant: e-commerce has evolved to become the main sustainer of business community and posses its own threats and benefits. Accountants with forensic skills champion the fight against e-fraud and other internet identity theft that are everywhere now. Again, accountants help their clients’ carryout proper investment appraisal on potential IT investments.
Internal control/ fraud fighting experts: internal control has consistently proven to be the holy grail of fraud fighting. You will reasonably take control of other affairs if you can just have a functional and vibrant internal control system in place in your business. Accountants are among the few experts that are well informed on the ins and outs of internal control and are therefore invaluable in the process of designing, developing, testing and implementing internal controls in businesses.
Notice that the roles of accountants in each of these offices changed slightly but also be aware that that does not create a silos in the role of accountants. A silo is the term used to describe a situation where functions are not correlated. Like I always do, I encourage all accountants to live up to expectation and face the challenges that come with varying roles of accountants.
Above all, accountants helps us to protect our investments. The importance of accounting and accountants should not be taken for granted
John Glenn, MBCI says
Accountant as Business Continuity “expert.”
Don’t believe it.
Business continuity done properly is truely Enterprise Risk Management and while this does require an accountant’s subject matter expertise, it is far beyond the capabilities and knowledge base of all the many accountants – CPAs and otherwise – I know.
Asking an accountant to be an enterprise risk manager is akin to asking an accountant to perform brain surgery – separate knowledge and expertise (I wouldn’t want a brain surgeon as my accountant, either.)
chinweike says
If you are conversant with the changes in accounting curricular of accounting professional bodies, you will have no choice than to agree with me. Thanks for your comment.
Cheers!
david north says
What roles do management accountants have in the enterprise risk management process?
chinweike says
Hi David North,
Am glad to see an intelligent question like this, this shows that you are indeed a forward looking professional. The roles of management accountants in enterprise risk management is closely tied to the interpretation of the financial implications of defaulting.
Failure to properly analyse risk in one unit quickly affects the other units of the business. The amount of IT training that accountants go through now put them in a better position to contribute on IT risks and financial risks. Gone are the days when accountants simply calculate variances and do some number crunching in preparing budgets, there dozens of machines that can do that now more effectively and efficiently.
All these still boils down to analysis and interpretation issues. Controls (management controls / internal controls) for instance will be useless if variances are not properly investigated before acting upon.
David, in as much as this reply is not ment to be a blog post, I have attempted to provide salient points here to get you thinking.
Thanks once again for reading, hoping to hear from you soon.
Cheers!
Chinweike