As defined in investopedia A professional person who performs accounting functions such as audits or financial statement analysis. Accountants can either be employed with an accounting firm, a large company with an internal accounting department, or can set up an individual practice.
Further any accountant takes a moral responsibility of abiding by the law of the land. The degree program they undergo like the CPA, CIMA or the CA would determine the educational qualifications of the particular accountant.
The international standards in accounting could be International accounting standards (IAS), UK GAAP, US GAAP, and International Financial Reporting Standards (IFRS). Globally there are lot of organizations which are famous for practicing accounting and auditing for major business giants and organizations to name few "Deloitte & Touche", "Ernst & Young"," PricewaterhouseCoopers", "KPMG", and "McKinsey& Company" etc.,. These companies have established their own brands in strong way by practicing ethical standards of accounting. However between late 70s in the previous century and recent time from every time zone across the world we have seen frauds committed by the organizations and the audit or the accounting firms managing this has been in the limelight for wrong reasons. This has put the accounting companies in a speculative category and local governments have tightened significantly the companies' law and the disclosure, reporting standards and frequency. Though as a banker and accountant we may not tend to agree the statement above, we need to admit that due to the fraud committed by some accounting firms the fraternity of accountants are penalized.
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Accounting is a nerve of any organization or an individual; this helps the organization in taking strategic decisions like
Launch of new products
Price Determination of particular product
Availing loan to improve the business
These are some key parameters an organization looks into, as known every coin has two sides the other side of the coin analyze the accounting into
Take decisions on investing or divesting in the company
Credit rating of the company enabling for loan facility
Scope of improvement in further business.
An accountant must be very clear that for whom and what purpose the information is prepared (Atrill & McLaney, 2011, pg4). These can be classified as user groups depending upon the requirement of the data.
Different user groups for accounting needs
Accounting data is more relevant to various user groups across the globe and in the country of operation of a company. They vary from promoters to investors, competitors to managers, suppliers to producers, and government. Atrill & McLaney have classified this user groups into
Ownersïƒ They are the principal investor in the company and should have the first hand information about the balance sheet of the business to make strategic decision.
Customersïƒ another key parameter without him the business of no use, he needs the information for continuous engagement of business with a particular organization
Competitorsïƒ May be threating factor for them to continue the business in the particular domain or to understand the market situation. The leader in a particular industry is taken as example and followed his footsteps.
Employeesïƒ to continue in the current organization or look out for. They understand the seriousness of the company. Payable of salaries and bonus, overtime and labor facility.
Governmentïƒ Regulator, takes decision on improvising the law of the land, tries to be fair and judgmental towards the organization. Look forward for support in terms of finance for particular sector. Positive approach in creating an industry
Community Representativesïƒ Focusses on the nature of business and looks for nonhazardous and environmental factors.
Investment Analysisïƒ Look for current and future risk and returns of the organization
Suppliersïƒ Helps in continuing the business without hindrance, looks out for the strength of the company for future supply, either to be in cash or credit.
Lendersïƒ Looks for ability to repay the existing debts and further addition of loans
Managersïƒ Wheels of the business, keep analyzing and take corrective actions where ever and whenever required.
Accountants provide financial information and statements to clients depending upon their requirements. These needs have certain quality and characteristic they as defined by Atrill & McLaney, 2011, pg6) are
Always on Time
Marked to Standard
Relevanceïƒ this parameter must help an organization in influencing a decision depending upon the past accuracy of information. This helps in judging the future events.
Reliabilityïƒ Information should be accurate and error free. The content should express the need and required content by the person who looks into.
Comparabilityïƒ Standardization of the reports and should be in line with the practice of the industry, an apple has to be compared with an apple only. The pattern of reports should be readable across the industry
Understandabilityïƒ This should be presented neatly and expressed as simple as it should be.
Accounting in OMAN
Oman is follows the international accounting standard and GAAP throughout the companies. We are more dependent on expatriates for accounting. The expats are predominately Asian; their professional qualification would be a Chartered Accountant form India. There are stricter rules in our bank controlled by Central Bank of Oman. Since we are in banking industry the internal audit team has to be vigilant and falsifying of accounts cannot be done.
However there were some irregularities found in one of the public limited company on records of accounting anomalies, but was rectified by the tribunal from ministry of finance. But the scam by an Indian Company Satyam computer services in association with an audit firm PricewaterhouseCoopers in 2010 with falsified accounts and by Lehman Brothers in association with Ernst & Young in late 2010 for not disclosing short term loan as a sale (Repo 105). This has significantly opened up the eyes of accounting practice in our country and a strict decree has been issued. The international accounting standards and International Financial reporting standards has been in place. Across the world there has been efforts made by the local government to adhere to stricter and stringent norms.