Importance Of Accountancy Profession

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Accountancy profession is concerned with the measurement, disclosure or provision of assurance about financial information that helps stakeholders make resource allocation decisions. Accountancy consists of different services such as financial accounting, management accounting, auditing and tax accounting. Each service can be essential to the management of a successful cooperation.
Financial accounting, mostly concern with the preparation and reporting of the annual financial statements of the company, allow stakeholders to make important decisions about the company. Without this service, the management team of the company that is not trained will prepare this financial information that are disclosed to various stakeholders. These may cause …show more content…

With auditing services, the company will be tested for errors and frauds, which gives them credibility if accounts are produced in accordance to the standards. Different stakeholders will benefit from this service, such as the company will be able to obtain a loan from the bank more easily, or shareholders feel safer in investing more into the company. However, the auditing team has to be independent to provide an unbiased opinion of the cooperation.
Without accountancy, it will be hard to raise funds through equity or debt to support the function of the business. Furthermore, company will be unable to evaluate their performance internally and improve on their business. However, accountancy does have disadvantages, as it is time consuming in preparing for the data and costly to engage the accountancy services when the budget and manpower can be spend on other aspects. However, I feel that the benefits of accountancy outweigh the consequence and accountancy should be essential to any …show more content…

For example, when auditors audit on the financial statements of the company, auditors faces the audit risk which has two elements; the risk that the financial statement contain material misstatement, inherent and control risk, and the risk that the auditor fails to detect material misstatement, detection risk. Firstly, auditors adopt the risk-based approach where they analyse the risks associated with the client and direct their testing to risky areas thus there is a likelihood that they fail to detect a material statement and express an inappropriate audit opinion. Secondly, the auditors rely on the information provided by the responsible party and the staff members may collude in fraud to deliberately hide or misrepresent matters for the auditors. Lastly, the financial statements are prepared on the basis of judgement and estimates, auditors will be unsure if the information provided is free from error since auditors do not oversee the process of building the financial statements from start to

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