The bookkeeping of a company is part of the accounting system, with which the cash flow and flow of goods of a company are recorded and monitored. As part of the bookkeeping, the company’s books are kept, the profit is determined, and all financial changes are documented. In small companies, only one person or a tax advisor is often involved in accounting. For large companies, accounting is divided into several areas, which are processed by different departments and employees. In this way, the payroll accountant records all salary payments, while asset accounting manages the fixed assets. Accounts receivable from customers are tracked in Accounts Receivable and Accounts Payable records the company’s liabilities to suppliers. All financial transactions are recorded in financial accounting. Based on the results of the financial accounting, the companies prepare their profit and loss account (P&L) and the balance sheet. Also, the results obtained are used for price calculation, they help with liquidity planning or when deciding on investments, and they form the basis for internal control measures.
Many times when an accountant accepts a contract with a client, he does not have clear guidance on how to proceed in a way that protects both his ethical responsibility and his professional responsibility. Below we offer a cycle of references that may be useful to you.
When, in the course of his professional practice, the public accountant decides to accept a contract with a client (whether he is a natural or legal person), there are a series of circumstances to which he must be vigilant to adequately fulfill his professional responsibility. In this editorial, we present some recommendations that the accountant can put into practice when starting the relationship with the user of its services.
Specify the roles and responsibilities with which it undertakes
As a first step, the accountant must ensure that the functions, obligations, and deliverables with which he undertakes as a professional. The fees he expects to receive for his services are written in the contract he signs with his client since your responsibility will be aligned with these functions. This is an independent matter of whether the accountant provides his services externally to the organization, in which case he must draw up a service provision contract, or if you will be linked as an employee, before which you must sign an employment contract.
For this, it is convenient that in the negotiation process with his client, the accountant inquires about the current status of the responsibilities and the procedures that he will be in charge, especially related to the accounting and fiscal obligations that the entity must fulfill before the different objects.
Control, surveillance, and oversight
In this way, the accountant can be clear about the responsibility he is assuming by accepting the said contract, and also establish his fees so that he receives an appropriate remuneration for his work.
Some of the questions that the accounting professional may ask at this stage are the following:
Are there transactions pending recognition in the accounting information system? Since that date?
Are there accounting notes or accounting vouchers (such as depreciation adjustments, impairment of accounts receivable or inventories, among others) pending completion? Since that date?
Has the accounting year-end been closed?
Have the year-end financial statements been prepared and presented with their corresponding notes?
Have the tax declarations required by the national and territorial inspection entities been formally settled and presented?
Is the accountant going to have a team of assistants or assistants to support their work?
In this sense, given that one of the characteristics of accounting information is to present financial details similarly when the public accountant signs the financial statements, he is publicly attesting to the two periods, regardless of whether or not he participated in the preparation of such information.
Given the preceding, it is convenient and justified the need for the accountant to review the balances and transactions that the entity has so far, to identify possible errors contained in the financial statements, and make the adjustments that consider relevant. At Mint Accountax, we provide Online accounting services in London. We have qualified and professional accountants. We are among the best accounting service providers in London. So, instead of wasting time act now.