Definition of an Accountant and the Essential Features of a Business Organization
Every business organization is expected to keep its financial records accurately and in an orderly manner. This task is expected to be performed by an accountant engaged for such purpose by the organization.
Who is an Accountant?
An accountant can be defined from broad perspective as a person who carries out accounting functions for or within an organization.
Since accounting includes financial accounting, cost accounting, managerial accounting and auditing, it means therefore that accountants also include financial accountants, cost accountants, management accountants and auditors.
Accounting been a profession also make it that in Nigeria for instance, there are professional accountants who are members of one or more accounting professional bodies such as the Institute of Chartered Accountants of Nigeria (ICAN) and Association of National Accountants of Nigeria (ANAN) in Nigeria.
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Accountants are those with necessary professional accounting qualifications who have been certified as fit and qualified to practice accounting by government approved accounting professional bodies.
Accountants render their services to business organizations. Business can be seen as a regular activity between two or more parties which leads to the creation of utility that satisfies human wants in form of goods and services.
From economist point of view, utility is the satisfaction derived from consuming a particular product or accepting a service.
Essential Features of a Business Organization
The followings are the essential features of a business organization:
The need to make a profit and ensure adequate returns for the owners no matter how small it may be.
1) There is an element of risk: It has been said before that business is a risk. There is an inherent risk in every business transaction irrespective of the amount involved.
Although, some businesses are more risky than the other, but the ability to handle and manage risk is part of business. In essence, any person that is not interested in taking risk cannot be involved in business activities.
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2) Business is done with the sole aim of continuity: It is not a one-off event, but there should be regularity and consistency in the trade. This will enable present customers to refer new customers to the business. Business is not started to sell or trade for a single period but for present and future purposes.
3) Where business is involved, there must be an exchange between the parties: The parties in a business must let go of one thing as a price for another. In such cases, there will be an exchange of goods or services for money.
In summary, an accountant is a person who carries out accounting functions for or within an organization. Accountants include financial accountants, cost accountants, management accountants and auditors.
In addition to the preparation of financial statements, accountants function include the analysis and interpretation of the prepared statements to different groups of users of the statement because not all users of financial statements have the required technical expertise to understand or decode the accounting language with which financial statements are prepared.
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