The Role Of The Accountant

Question 1

Responsibilities of the Accountant

(Hint: Financial info, Financial Statements, Accounting Procedures, Business related activites)

Answer 1

• Produce budgets for the business
• Ensure financial statements and tax returns are submitted by deadlines
• Auditing: Look through financial statements to ensure they provide a fair, accurate view of financial performance
• Analyse financial info to highlight where financial performance can improve in the business
• Introduce new accounting procedures to the business

Question 2

What is management accounting

(Hint: Define planning cost and decision making)

Answer 2

Focuses on planning, control and decision making in business

Planning - Preparation of budgets
Control - Standard costing + calc of variance between standard/actual costs
Decisions making: Short term (Marginal cost system) or Long Term (Capital appraisal system)

Question 3

What choices do management accounts have in decisions

Answer 3

They can be Long term decisions by using a capital appraisal system or short term decisions by using marginal costing

Marginal costing - the cost added by producing one extra unit of product or service

Capital appraisal system - Evaluating and deciding what long term investments should be made in the business

Involves assessing the potential profitability and risks of various projects and allocating financial resources accordingly

Question 4

What is financial accounting

Answer 4

Using historical information to create financial statements (e.g Statement of Financial Position, Income Statement, Statement of Cash flow, Annual report)

Question 5

BOOKEEPERS VS ACCOUNTANTS

Responsibilities

Answer 5

Bookkeepers (AKA ledger clearers): Day-to-day transactions:
- Maintain accounting records
- Enter transactions to the business
- Check accuracy of accounting records

Accountants: Responsible for prep of financial statements
- Financial statements show a fair and true view of business
- Ensure accounting concepts have been applied

Question 6

Who are the auditors in the business

Answer 6

Auditors are appointed by directions of limited companies to independently check the financial statements that were prepared by the accountants.

Auditors report back to shareholders to ensure financial statements provide a “fair and true” view of the business