CPAs Role in the Recovering Economy

In such a recovering economy, Certified Public Accountants (CPAs) should be even more strongly relied upon. Investors want to invest their money on the right and trustful companies. Companies with honest growth, ambition, and/or potential look for money. The overriding objective of an ethical CPA is to make sure this logic remains as such: worthy companies must have access to the financing they deserve. To do this, a CPA uses one of the few ways of communication he has at his/her disposition: the financial statements.

The job of a CPA is to avoid creating a promising elusion or hype around companies’ earnings

 It is really common to hear investors complaining about a bad economy hitting their before-promising stocks. However, it is not as common to hear them acknowledging that the stocks they actually bought were not as promising as the media, analysts, and other outsiders expected. The job of a certified Public Accountant is to avoid creating a promising elusion or hype about companies’ earnings that would disappoint, later on, the investors, and therefore make them skeptical about the market. If investors become reluctant, financing will become scarce and inefficiently allocated. CPAs have to establish, on a daily basis, this trust that allows companies to get the right financing. To do so the financial statements have to represent the true financial image of the companies and not some shenanigans that would, on a short term, elusively enhance the financial position of those companies. By doing so the “wrongful” and not-in-so-good shape companies would not deprive the others to get financing.

CPAs are one of the most efficient facilitators of the allocation of resources

By understanding all the voluntary or involuntary manipulations on the financial statements, CPAs, by giving an unmodified opinion, qualified opinion, adverse opinion, or a disclaimer of opinion on the financial statements, create this transparent and uniform language that makes investors have confidence in the market. CPAs are one of the most efficient facilitators of the allocation of resources since investors started to rely on financial statements to invest. To become and remain this trusty party that investors and companies need in order to grow, CPAs have to be knowledgeable and ethical.

Posted by Anthony Aymerich