In accounting business, honesty and integrity play an essential role for shareholders as they have to decide whether to invest in a company in or not based on the information they receive. Business managers tend to rely on honest accounting to run their companies without any stress of biased accounting. One of the essential characteristics of the accounting profession is honesty. It allows decision-makers to make appropriate decisions.
Guidelines created to ensure honesty
Accountants in Blacktown NSW has to follow some guidelines and rules to standardize accounting information so that all stakeholders, including internally and externally, can use the information in the same way. Such rules and guidelines are known as generally accepted accounting principles. Professionals in the financial industry need to follow these principles.
Audits ensure honesty
Financial statements must be authentic and accurate. Public companies outsource their work to certified public accountants to audit their books to make sure financial reports follow the generally accepted principles. Routinely, small business owners request an outside audit of their books to ensure accountants are staying true so they can forward the reports to investors and other stakeholders. Commonly, an audit is an investigation used by organizations to prove books are reasonably representative of the company's financial health.
It is essential to gain the trust of the company's investors because when they tend to lose faith in the company, they choose to take their business elsewhere. The company’s future rests on its accounting practices.