Roles of Auditors and Accountants in Improving the Accountability of Public and Private Bodies

Businesses require experts in different fields for their success; accounting and auditors are part of the larger team with a financial and operational role to play. Other than in audit firms and financial consultancy organizations, accountants and auditors are in the support service department providing expertise to other departments. Auditors can further be classified into internal and external auditors; internal auditors are employees of a company while external auditors are independent parties who are supposed to work independently for the benefit of users of accounts. Internal accountants are part of managerial tools that assist management and external auditors to make strategic decisions.

Accountants are professionals at different level employed by a company for their service and assist in overall management of firm. Accounting is part of the whole organization, thus for the department to be able to uphold high ethical standards, the environment it is operating in should be favorable; however, despite the fact that some conditions may not be favorable, management accountants and auditors should uphold an ethical behavior and facilitate accountability in an organization (Kieso, Weygandt and Terry, 2009).

Every organization has an organizational culture that acts as unhidden force that controls how business conducts; some culture may support an unacceptable behavior thus the company lack accountability. This paper discusses the role of auditors and accountants in improving accountability in public and private bodies.

Accountability and ethics in public and private bodies

Organizations are set with the role of accomplishing a certain task; the operations are aimed at fulfilling certain obligation, which the companies have towards its stakeholders. In private sector, the managers and entrepreneurs are supposed to get their expectations. There are also the employees, shareholders and the public in general; all these people calls for private firms to be accountable of their operations.

Public firms are owned by shareholders who delegate their management role to directors and management team; there are also other government owned firms financed through taxes money; they are made to fulfill certain role in the society like provision of electricity, water and security. For this noble role to be fulfilled, accountants and auditors play a role to ensure that money is channeled to the right projects and not embezzled.

Accountability means that a company can be held responsible for its operations; it goes further to include the operation of employees. Corruption and embezzlement of funds are example of lack of accountability (Machan, 2007)

Uses of financial statements

Performance of period covered by a financial statement is reflected in the final audited accounts of a company. Investors, existing shareholders, managers and the government, use the accounts to make various decisions; if the accounts do not represent the true picture of a company, then they will be misleading. Auditors and accountant have the following roles in their efforts of facilitating accountability:

Roles to account users

Accounting and auditing information are used for decision-making internally and externally; the users include managers, shareholders, government, potential investors, investors, capital lenders among others. These users need true and fair statements and raise the need for accountants to act with high level of professionalism and uphold acceptable accounting ethics. Realizing this important role played by accountants, international and national accounting bodies have developed accounting professional ethics, which their members are expected to respect always.

Companies and corporations, whom issue various classes of security or hold assets in fiduciary capacity, for example banks and insurance companies are required to prepare/report their accounts in accordance to International Financial Reporting Standards (IFRS). This is done for the interest of the public alongside other stakeholders. Failure to comply leads to harsh punishments from these bodies.

On their side of accountability, accountants and auditors are expected to be creditable and can be accountable for all their actions. They should not perform duties that they are not fully conversant or not qualified to perform or offer misleading advice or limited advice as per his level in an organization, this enhances accountability in an organization. Accountant’s level of independence and professionalism should be high enough that they can have courage to say no and keep their integrity intact in case called by their employer or any other external party to act unethically. When working, they should ensure that there is no conflict of interest and does things in a straightforward manner. Need for annual membership to professional accounting bodies is seen as a move towards ensuring that there the bodies control their members conduct (Moeller, 2009).

When accountants give their report, they should not be favoring their employer or contactor, they should report the situation as it is. In case a company is having faulty deals, by the recognition that the accounting and auditing will expose the operation the company will endeavor to operate in an acceptable manner to maintain public image. One of the reason why some companies cannot be held accountable for their operation and continue to have a positive picture in the eyes of the public is because the deals are not exposed. If the accountants and auditors expose such deals, they will be halted. For example, one area that has been blamed for corruption and lack accountability is in procurements, if accountants stand their ground and expose such dealing, corrupt employees will stop the deals and become accountable of their actions.

The role of Accountants and auditors to uphold international accounting standards

International financial reporting standards (IFRS) require that firms should prepare financial accounts reflecting the operations undertaken during a certain period. The custodians of IFRS at a company level are accountants; in public companies, to report is a statutory requirement; it should be in line with an international Accounting Standards.

When companies report and operate according to the required international standards, then the accountability becomes a virtue that they must uphold. According to the international standards, auditors should be independent of any influence from either the company or external forces. Accounting profession requires that before someone is registered as a member professional accountant, he or she must have attained a certain minimum level of education and professional training. A professional cannot tolerate fault deals so if accountants are well educated and respect their professionalism as required by the international accounting standard, they are likely to maintain integrity (Roberts, Weetman and Gordon, 2008).

Accountants need to be accountable and lead by example; accountants need to update themselves with the changes happening in the accounting field; changes are initiated by local policies like finance bills (mostly on matters relating to taxation) and international bodies like International accounting bodies. For competency, an accountant is expected to be up to date with such changes. An example of a change in international accounting standards is the change in new ways of accounting for SMEs in 2008 and change in accounting for leases, ISA 17 in 2010. A member of these bodies must be up to date with such changes.

Some unaccountability may occur in an organization from ignorance of acceptable or changed standards, accountants and auditors should be in the forefront ensuring that their company has up to-date information on modern strategies, standards and expectations. It is by doing this that they can be accountable. For example, there have been changes that companies should account for their environmental pollution, when such information gets way to financial reports; it either gives a positive or negative picture of the company. If accountants advise their companies effectively, they can enhance accountability (Abbott, 1998)

The role of accountants/auditors to internal customer

Some policies are implemented in a company to enhance productively; to some extent accountants have, the role of ensuring that the policies are well implemented by concerned departments so as the company can meet its financial targets. Management of a company should ensure there is efficiency and transparency in their organization. One tool used to facilitate efficiency, transparency and informed decision-making in a company is use of audits, external and internal audits.

They are used to minimize dishonesty, assist in proper administration and ensure that professionalism and integrity are upheld in an organization. internal auditors are able to recognize the areas that are not meeting the expectations of the organization and offer appropriate advise; when such advises are given then a company can be accountable. Internal auditors acts as management watchdogs; they demand and call for accountability in an organization; when employees acts are accountable then the entire organization is likely to be accountable. When determining what to disclose or not, management accountants are expected to be guided by international accounting and reporting standards (Saks, 1997).

Accountants are custodians of information that can shape the direction of a company from internal and external users’ angle. Employees of the company require this information to determine the capability that their employer has; accountants have access to such information and thus the decision of what to give and what to maintain confidential affects a business operation. In the hard economic times, the employees require this information to interpolate the future of the business and are able to make any adjustment that may be relevant. The shareholders need these accounts to evaluate the way the business is run.

They are able to know the dividend that they are likely to get. When a company is getting loan from a bank, this are the accounts that are used to evaluate the credit worthiness of the company. For the accounts to be of help to the users, the required user should make them in such a way that they are understandable. This does not mean that a different set be made, but it means that analysis the information in different way is of importance (Barry and Jermakowicz, 2010). They must give the true status of the business. Understandability is another aspect the reports should have.

External auditors as financial advisers

Other than auditing financial accounts and reporting them to the concerned parties, the role of external auditors have been extended to financial advice. They may do this as extra tasks in their contracting or they may offer the way forward in their letter to accounts written after an audit. They give recommendation and suggest appropriate strategies to have fulfilled their objectives. If a company has to be accountable to its shareholders and other stakeholder, it should fulfill its mission and vision. Auditors have the advantage of analyzing different strategies in different countries thus; they can offer advice for the good of a company. Areas that they can assist include in process automation, environmental conservation policies and pricing strategies.

External auditors to large extent depend on reports from internal auditors; they depend with the reports if internal auditors of a company are effective. On their side, after an audit they are supposed to evaluate and give recommendation on how to internal controls should be managed, the result of such a move is an organization with well-managed processes and fulfilling its financial a social goals.

Accountants as financial advisers

At different times, companies need to develop new projects; the financial implication of projects should be analyzed, accountants have the role of project analyzing using different tools of projects management. Buying an asset is a costly investment that needs to be thought and well interpolated. Cost benefit analysis of the investment should be done to ensure that an asset acquired results to a gain of a company; both financial and social cost should be considered. Management accountants have access to crucial and sensitive company’s information; the information can be used for strategic decision-making. Some of this information can be used by a company to outdo competitors; with such information, then accountants can offer strategic advice and guide way to accountability (Bruce, 2010).

What light is shed on this matter by recent experience?

Currently there are a number of changes happening in the business world, the changes are in how businesses are operated. Technology and scientific innovations have resulted to flow of capital across borders; it is now possible for investors living in different parts of the world to participate in stock exchange of other countries. This change in the global environment has pushed the need for accountability a notch higher.

Foreigners are more likely to use financial information as the only reference of a foreign company that they want to invest in, they are interested in the mission, vision and strategies set out in the company’s financial statements to make final decision if they will have to invest in such companies. Accountability as far as foreigners are concerned comes into two angles, they need to be given true and fair accounts from external auditors for their analysis, they also depend on companies accountants and internal auditors to ensure that the raid down policies are upheld in the company. This is the only way that they can be assured that their investment is saving.

When a company is accountable for its operations, then it is more likely to be following set standards and strategies that might have attracted investors. Being accountable is ensuring that the strategies are implemented and the needs of investors have been respected (Cascarino and Esch, 2007)

In current business world, there have been moves to social accountability; this is where companies are called upon to be socially responsible for their actions in course of production. Social accountability is in the areas like environmental conservation, corporate social responsibilities and ethics in business. Accountants and auditors should include an evaluation of these new areas in their duties. They should be in the forefront to ensure that there is social accountability. The beneficiaries of social accountability are the public who in turn give back to a company in the form of pledging their loyalty to these firms.

For an example, there was a time that Toyota was accused of having faulty cars, which caused accidents in the United States, the company was held accountable and accepted liability, the resultant effect was that its accounting department compensated the losers and made a provision in their budget to cater for such misfortunes in the future. Starbucks coffee company is respected for its efforts to be accountable in environmental management, the company has been successful to attract suppliers who respect the environment. The accounting department supports such a move as it allocates money for such operations.

There have been changes in accounting policies, to reflect the new changes and hold a company accountable, then accountants and auditors have a major role to play. Current changes like in accounting for leases (ISA 17) and the introduction of international financial reporting standards for small and medium scale traders change the direction that a company has been taking in terms of its disclosures. Accountants are more versed to such changes and thus should be in the forefront training the company for its own good, they should have open and closed forums to explain to non-accountants the changes that have occurred.

The world has embarked on massive technological development, when using information technology records are hard to alter and thus, when a transaction has taken place, the entered value most probably will remain the same. Accounting systems also have codes and it becomes easy for a company to know the person who made an alteration. This called for more corporations among the auditor to ensure that they input the correct information for proper management and control. The information entered must be subjected by proper analysis by the tools if the company is to benefit.

For instance when a purchase transaction has occurred, the computer through electronic recording notes and records the transaction independent of the players involved (Jones, Parker and Bos, 2005)


It is ethical for private, public and nongovernmental organization to be accountable of their decisions and activities. Accountants, internal and external auditors has the role of maintaining accountability in an organization; they do so by being accountable for their actions then leading their enterprise to accountability. Professionalism should be held high in an organization and management should ensure that they could account for their actions to relevant stakeholders.

Accountants and auditors have access to sensitive information that can be used for the good or bad of their organization; they should keep the information confidential and only disclose according to international accounting standards requirements. When there is appropriate disclosure, companies will be more careful to act ethically for the sake of their business name.


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Jones, C., Parker, M. and Bos, R.,2005. For Business Ethics : A Critical Text. London: Routledge.

Kieso, E., Weygandt, J. and Terry D.,2009. Intermediate Accounting. New York: John Wiley & Sons.

Machan, T., 2007. The Morality of Business: A Profession for Human Wealth-care. Boston: Springer.

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Saks, M., (1997). Professions and the Public interest: medical power, altruism, and alternative medicine. New York: Routledge.

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