The theoretical framework of accounting means the set of frameworks, methods, and assumptions that are used to study and apply accounts in financial situations. This also refers to the study of the official changes that affect financial framework and financial reporting by authorities.
An accounting framework is a set of norms that are used to measure, recognize, and present the information that appears in an entity’s financial statements. A conceptual framework is defined as a set of ideas and objectives that leads to the creation of a persistent set of rules and standards.
The theory of accounts comprises both the study of historical accounting methods and also the accounting practices that are used in the current financial applications. It also examines the official changes that are made to the financial framework and financial reporting by authorities.
A person, who carries out such an accounting process individually or in any organization, is referred to as an accountant. An accountant is a professional who carries out accounting activities such as audits and financial statement analysis. This process can also be called account analysis. Accountants get employed with any accounting company with an internal accounting department. Sometimes they start their practice individually.
What is the Role of an Accountant?
An accountant carries out all financial activities that are related to the accuracy, collection, analysis, recording, and presentation of financial operations. Generally, the accountant also handles all the third parties, like vendors, customers, and financial institutions. He/she should also be responsible for holding other administrative functions in an organization.
The other roles of an accountant include statutory auditing, internal audit, and taxation. Some of the functions of an accountant are maintaining a book of accounts, statutory audit, internal audit, budgeting, taxation, investigation, managing advisory services, and other roles to act as liquidator, cost accountant, arbitrator, etc.
Roles and Responsibilities Accountant
Now, if we talk about the major role of an accountant in an organization, he plays a significant part in its growth and long-term profitability just like other key stakeholders.
The main responsibility of an accountant is preparing asset, liability, and capital account entries by collecting and analyzing account information.
The basic role of an accountant includes establishing accountability of all the assets under an individual’s control. The image below gives an idea about the role of an accountant.
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Accountant Roles and Responsibilities
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To prepare accounts and tax returns
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To maintain payrolls and control the income and expenditure
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To auditing financial information
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To collect and present reports, budgets, business plans, and financial statements
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To analyze accounts and business plans
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To provide tax planning services about current legislation
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To finance forecasting and risk analysis
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To deal with insolvency cases
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To negotiate the terms of business deals and moves with clients and associated organizations
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To meet and interview clients
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To manage colleagues, workloads, and deadlines.
Role of Chartered Accountant
It is the responsibility of a chartered accountant to give advice, audit the accounts, and provide accurate information about all the financial records. This might also include financial reporting, forensic accounting, auditing taxation, corporate finance, business recovery, insolvency, or accounting systems and processes.
It is the chartered accountant’s responsibility to implement the accounting systems, prepare monthly financial reports, control the master data of the general ledger, and ensure compliance with the state revenue service.
Most of us would have observed how our parents work and receive their salaries. If we have parents working in the accounting team of an organization or running their business, we will even be familiar with certain accounting terms!
A theoretical framework usually consists of a structure that includes methods and theoretical assumptions which can facilitate the execution of an idea or task. In a financial situation, theoretical frameworks are used to devise accounting norms that can measure, analyse and present financial data as it appears in an organization’s records and reports. Setting out financial objectives also helps create a standardized set of accounting rules and regulations adhering to a strong conceptual yet practical framework.
Theory in accounts today comprises a combination of accounting methods used since historical methods and modern-day financial applications and methods. A qualified professional who sets up, analyses and manages accounting systems and processes for an organization is known as an accountant. They might be employed with a firm that has a robust finance team or is in the process of setting up one. Experienced accountants might also choose to have their consultancy firms. Traditionally, accountants have been responsible for carrying out internal financial audits and analyzing financial statements and reports for the organizations.