Accounting roles and relationships

Begin with the organisation’s decision

The word accountant does not describe one uniform job. An accountant may investigate a suspected fraud, design a budget, prepare a tax return, assess a financial report or help managers understand why a service is losing money. The common connection is the use of financial and related information with professional competence and responsibility.

For any role, ask what decision or obligation the work supports, who will use the output and what authority the accountant has. An employee preparing a board paper has a different mandate from an external practitioner engaged to provide assurance. Both need sound judgement, but their responsibilities should not be assumed to be identical.

An accountant also works within a network of relationships. These may include clients, managers, colleagues, staff, regulators, professional bodies and people affected by the organisation. The person giving an instruction is important, but is not the only party whose interests or rights matter.

Public practice: scope, expertise and boundaries

Public practices range from small firms serving local businesses to large multidisciplinary organisations. Size changes the resources and specialisation available, but does not remove the obligation to match the engagement with appropriate competence and care.

Services may include financial reporting, taxation, assurance, forensic work, insolvency, internal audit, systems advice or business support. Some activities require additional registration, licensing or specialised expertise. A service label on a website is not enough to establish that every staff member is qualified to deliver it.

Different services for the same client may create conflicts or independence concerns. An engagement should be assessed in its actual context rather than assuming that a broader service offering is always better.

Small businesses and their advisers

A small business may lack a dedicated finance team and rely heavily on an external accountant. Regular compliance work can create familiarity with the business, but useful advice also requires understanding its operations, constraints and owner’s objectives. The accountant should not assume that every owner wants rapid growth or is comfortable discussing financial difficulties.

Trust and communication affect whether a business seeks and uses advice. The owner may worry about cost, confidentiality or receiving technical explanations that do not translate into practical choices. Clarifying the scope and value of a proposed service can help, without promising outcomes that cannot be guaranteed.

Concept sources: IFAC (2016), The Role of SMPs in Providing Business Support to SMEs: New Evidence — Key Findings — research highlights the importance of trust, communication and varied influences on demand for advice.

Accountants within a business

In a large organisation, accountants may specialise in reporting, treasury, tax, planning, controls or performance analysis. A smaller organisation may expect one accountant to cover several of these areas. Breadth can make the role valuable, but also creates a need to recognise when specialist help is necessary.

The finance function contributes to decisions as well as reporting what has already happened. It can connect operating assumptions to financial consequences, challenge inconsistent plans and explain performance. This does not mean finance owns every operational decision. Useful partnering combines knowledge of the business with a willingness to question unsupported assumptions.

The guide discusses the broader contribution of a chief financial officer and the idea of a chief value officer. The central idea is attention to how the organisation creates and sustains value, including relevant non-financial drivers. It is not a prediction that every organisation must replace the CFO title or that financial discipline becomes unimportant.

Concept sources: IFAC (2018), Identifying the Role of the Finance Function in Enterprise Performance Management — finance’s contribution can extend beyond traditional reporting and systems.

Government and not-for-profit work

Public-sector accounting supports the use of resources for public purposes. Questions can include whether spending was authorised, whether services were delivered efficiently and whether outcomes justify the resources used. A financial surplus alone cannot establish success if essential services were not provided.

Not-for-profit organisations likewise need financial sustainability, controls and reliable reporting. Their purpose changes the meaning of success; it does not eliminate the need to manage money well. Restricted donations and grants may limit how funds can be used. A healthy total bank balance can coexist with a shortage of funds available for general operating costs.

The illustration is simplified: it highlights the decision, not a complete accounting treatment of grant income. The recognition and presentation requirements would need to be assessed separately.

Advice, authority and conflicting expectations

Clients may assume their accountant can advise on any financial matter. Competence in accounting does not automatically provide the legal authority or specialist knowledge needed for every form of financial advice. A professional response clarifies what can be provided and obtains appropriate specialist input when required.

Relationships can also pull in different directions. A manager may want a favourable performance report, colleagues may want protection from criticism, and the board may need a candid assessment of risk. The accountant should identify the duties relevant to the work, establish the facts and communicate through appropriate channels. Loyalty does not require concealment, and disagreement does not justify careless disclosure.

Self-check: one fact, different roles

Willow Repairs asks three people to consider the same overdue customer balance: its internal accountant, an external business adviser and its auditor. Would a single task description fit all three?

Answer: No. The internal accountant may help manage collection and cash forecasting. The adviser may assess business options within the agreed engagement. The auditor evaluates the balance and related reporting in the context of the audit. Their evidence needs may overlap, but their mandates and responsibilities differ. The auditor does not become responsible for managing the customer relationship merely because the balance is examined.

Connection: The public-interest obligation travels across roles, while the specific work, applicable requirements and relationships vary. Good case analysis explains both the common responsibility and the role-specific boundary.

Sources and further reading

Study-guide reading: CPA Australia, Ethics and Governance, fourth edition, November 2023, Module 1, printed pages 28–35. Original examples here illustrate public practice, business and purpose-driven organisations.

• IFAC (2016), The Role of SMPs in Providing Business Support to SMEs: New Evidence — Key Findings.
• IFAC (2018), Identifying the Role of the Finance Function in Enterprise Performance Management.