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Understanding the Role of Accounting on the European Economy

Europe was known as a continent with one of the best economies in the world. Even though this is not a past glory, as the continent still stands in the fore of the world economy, the state of her economy is not what it used to be.

More recently, there have been business failures from various organization across the nations, including prolific ones. It is not just because the economy has felt more tension than it used to, but because there are issues and troubles with accounting and auditing of many organizations and important sectors of the nations.

In light of the recent business failures, individuals and representatives from organizations have taken primal steps to get educated on accounting practices and ethics. There are institutions that take courses in accountancy and provide certifications in Accountancy after CPA examination. You can check out which one is best for you with Surgent CPA review.

Here are primary places where the continent needs the roles and duties of an accountant.

1. Internal Auditing:

Many organisations and government alike underrate internal Auditing. An accountant or someone who certified in the operations have a duty to subject a company's process to its objectives. Hence auditing is meant to bring about an orderly discipline and checks for effective actions, risk management, business control, and administrative processes. Hence, an auditor is to,

  • Review an organisation's business processes, internal control, and administrative processes.
  • Provide timely record and tracking of an organisation's assets
  • Proffer risk management processes.

2. Financial Reporting:

Capital markets require detailed and quality financial reporting. Europe has built an international standard policy of financial reporting via the application of International Financial Reporting Standards (IFRS). Therefore, it is expected that a business complies with this rule; this is only possible for someone who is schooled in accounting or professionally trained to provide the service.

Companies are facing challenges in training and educating their staff on this path. The profession of accountancy has taken steps to introduce the practice of IFRS. CPA is a sure way to keep yourself relevant in these hard economic times for the financial sector of various organisations.

An accountant is expected to have the skills and experience to handle the financial records of businesses and balancing every expenditure with revenues, as well as the values of liabilities and assets. In the face of a greater economy, financial reporting would consist of business risks and directors' report.

3. Quality Assurance:

Accountants cum auditors have responsibilities that require them to have adequate public oversight in quality assurance system. Hence, their duty is to perform timely checks and self-regulation of actions and expenditures. There should be a systematic link between negative outcomes of qualitative reviews and a disciplinary system.

Therefore, to help businesses raise the European banner of economy, accountants should:

  • Promote global accounting and auditing solutions according to the meet of the European Union
  • Exhibit principle-based strategies with flexibilities and multifaceted applications
  • To rationalise quick implementation of better quality assurance protocols.
  • Take informed and final decision on risk management and statutory auditor's independence.

To meet up with the EU standard, the EC recommends that accountants take up national programs and quality assurance in lieu of EC's recommendation. You can find out flexible programs that would suit your schedule with Surgent CPA reviews.

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