Accountants are highly trained in math, accounting, law and finance so that they can describe the health of an individual, company or non-profit organisation using numbers and financial statements. Using standard practices, accountants analyse profit and loss. Their work provides the information that investors and others need to evaluate how a company is doing over time. The information forms the basis of a company's annual report and legally mandated filing reports. Accountants also do audits to verify the data that a company provides. If the accountant is on staff at the company, the audit is an internal audit. Outside accounting firms perform external audits.
One important reason to conduct an external audit is to get outside consultants to check a company's financial records to ensure that nothing fraudulent is happening. During an audit, an accountant compares all of the receipts, invoices, purchase orders and the documents of other transactions against the records. It's the same kind of investigation that the Internal Revenue Service does if it audits your tax return. Assuming that you followed the rules, an audit won't reveal any new information. However, if there are mistakes or if anything illegal is being hidden, an outside audit by an accountant will probably discover it.
Giving Financial and Investment Advice
Accountants help people to navigate the frequently changing financial, investment and tax laws so that they can keep as much of the money they earn as possible. Many companies, non-profit organisations and individuals pay an accountant or a certified public accountant who they trust to give them shrewd advice whenever they're considering a decision that has any financial consequences.