Money is a great motivator, which is why financial reports exist. Financial reports must contain truthful and unbiased information, and accountants must create unbiased and accurate financial reports for those who deal with finance in the various sectors of society.
Accounting is the legal and moral method to create accurate and honest decisions that will guide a company, a society or individuals to make honest and accurate actions and decisions.
Creditors. Accountants create and support the standards and laws that regulate accounting. The accountant is the primary responsibility for this. Banks and lending institutions rely on financial statements: such as balance sheets and income statements to determine the financial position and health of companies who apply for loans
Investors. People who invest money in companies are led to do so by the belief that such companies are profitable and in good financial health. Investors provide the much needed capital to increase business activities that lead to economic prosperity. If financial reports are manipulated to make companies appear superficially attractive to investors, many investors may suffer losses and lose trust in the investments market.
Companies. Businesses rely on financial reports to assess their progress. Such reports provide companies the information to plot their financial future. Financial mismanagement will lose customers and employees.
The Public. Government accounting reports assurance the general public that the people’s funds are in good hands. Government accountants and auditors have the responsibility to ensure accounting laws and principles are applied when preparing financial reports.
Accounting is more than just “number crunching”; Its the bulwark that supports our way of life. Without it the people’s trust and confidence in the government and our culture is threatening.
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