Importance Of Financial Accountability

What is accountability?
This is the guiding principle that defines how a corporation makes commitments to one another including employees, investors and clients, and how we measure and report their financial and non-financial, economic and social positions. The accountability has become an indispensable tool for companies to manage the corporate environment and factors. Companies and investors can interact when things go wrong, and how much ownership we take to get things done. In addition, the community can observe how a company impacts them. Therefore, this is the corporation’s obligation to account for its activities, and to disclose the financial and non-financial results in a transparent manner.

What is financial accountability?
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They have missions, and perform their activities based on the missions. They are funded from a various sources including government, private, public foundations and individuals. Those funders require the needs for information regarding their contributions to verify the financial and programmatic performance of the non-profit organizations. In addition, government tends to scrutinize the performance of the non-profit organizations because of their relationship with the public’s interest. Accountability for non-profit organization is essential under these circumstances. A primary responsibility for directors and officers is to ensure that the organization is accountable for its programs and finances to its contributors, members, the public and government regulators. Accountability requires that the organizations comply with all applicable laws and ethical standards, follow the organization’s mission, conflict of interest, ethics, personnel and accounting policies. This procedures protect the rights of members through preparing financial reports, and making the report available to all members of the board and any member of public who wants it. In addition, non-profits are increasingly relying more on earned income and less on donations and grants. Accordingly, their missions are more likely to be engaged in commercial activities. Therefore, the demands for transparent …show more content…
Accountability and transparency for nonprofits includes ensuring that you are effectively providing this benefit service. Professional financial accountability ensures fiscal controls are in the right place at the right time. Allocate budgetary funds effectively for the right purposes. Accountability is most important in the financial management since non-profit organizations are held accountable to their donors, contributors and citizens for collecting and distributing public funds according to budget priorities and for minimum cost. During the budget preparation essential figures estimating revenues and limiting expenditures are produced. As each donated funds provide limited resources, it is necessary to ensure that each spending department is allowed to spend only these funds that were guaranteed in the budget appropriations. Therefore, accounting control keeps track of financial activities made by all non-profit organizations. It is critical in monitoring and reporting of receipts and expenditures against their raised funds from various