Accountability

The responsibility of either an individual or department to perform a specific function in accounting. An auditor reviewing a company’s financial statement is responsible and legally liable for any misstatements or instances of fraud. Accountability forces an accountant to be careful and knowledgeable in their professional practices, as even negligence can cause them to be legally responsible.

An accountant is accountable for the integrity and accuracy of the financial statements even if errors were not made by them. Managers of a company may try to manipulate their company’s financial statements without the accountant knowing. There are clear incentives for the managers to do this, as their pay is usually tied to company performance. This is why independent outside accountants must review the financial statements, and accountability forces them to be careful and knowledgeable in their review.


Investment dictionary. . 2012.

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  • accountability — (n.) 1770, from ACCOUNTABLE (Cf. accountable) + ITY (Cf. ity). Earlier was accountableness (1660s) …   Etymology dictionary

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  • accountability — noun ADJECTIVE ▪ greater, increased ▪ local, public ▪ demands for greater public accountability in the police service ▪ individual, personal …   Collocations dictionary

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  • AccountAbility — An international *not for profit organization dedicated to the promotion of *sustainability and corporate *accountability Based in London, and founded in 1986, AccountAbility’s full name is the Institute of Social and Ethical Accountability. Its… …   Auditor's dictionary

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