What is Accountability?
Definition: Accountability is the action of being held responsible for the results obtained after performing a given activity. It is a situation where what is being delivered is reviewed and evaluated.
Accountability is the obligation of an individual or organization to account for its activities, accept responsibility for them, and to disclose the results in a transparent manner. It also includes the responsibility for money or other entrusted property.
Accountability is when an individual or department is held responsible for the performance of a specific function. Essentially, they are liable for the correct execution of a particular task, even if they may not be the one performing the task. Other parties rely on the task to be completed, and the accountable party is the party whose head will roll if the action is not carried out. Accountability is common in the financial arena and in the business world as a whole.
There are several examples of accountability in action. Relating to accounting jobs, an auditor reviewing a company’s financial statement is responsible and legally liable for any misstatements or instances of fraud. Accountability forces an accountant to be careful and knowledgeable in their professional practices, as even negligence can cause them to be legally responsible.
What Does Accountability Mean in Business?
In a business context, accountability is essential to keep work relationships transparent and productive. It basically means that an employee’s activities should be reviewed from time to time to provide some feedback to him, so he can work more effectively. Accountability also aims to avoid negligence and wrong doings in the workplace. Employees should be held accountable for what they do, to the extent that they were conscious of what they were doing.
An employee’s accountability is closely related with their work duties. An employee can be held accountable for anything they do within the parameters of what they were hired for.
That means a company can’t hold an individual accountable for doing something they were not supposed to be doing. Accountability becomes more important for senior management staff, since the impact of their decisions is higher. This means that top executive activities should be more thoroughly reviewed in order to avoid misconducts and undesired consequences from wrong decisions.
Accountability is an assurance that an individual or an organization will be evaluated on their performance or behavior related to something for which they are responsible.
The term is related to responsibility but seen more from the perspective of oversight. An employee may be responsible, for example, for ensuring that a response to an RFP (request for proposals) meets all the stipulated requirements. In the event that the task is not performed satisfactorily, there may or may not be consequences. Accountability, on the other hand, means that the employee is held responsible for successfully completing the task and will have to at least explain why they failed to do so.
Corporate accountability involves being answerable to all an organization’s stakeholders for all actions and results. Through performance and accountability reporting (PAR), for example, an organization compiles and documents factors that quantify its profitability, efficiency and adherence to budget, comparing actual results against original targets. The PAR process is usually carried out once per fiscal year, although in some cases it is done more often.
Corporate accountability also implies that an organization must be answerable for any deviations from its stated goals and values, which might be documented and made publicly available through a mission statement or vision statement. Beyond that, the concept of corporate accountability is often broadened to imply a requirement for business to follow ethical, responsible and sustainable practices.
Accountability and transparency are generally considered the two main pillars of good corporate governance.
Mr. Smith is a Certified Public Accountant. He works independently for a handful of private businesses providing bookkeeping services and tax advice. He has a 4-people team to help him carry the load of work that comes into the office daily.
These team members manage different clients and they mostly do the bookkeeping tasks while Mr. Smith focuses on more complex accounting matters. He conducts a staff meeting each Monday to get updates about the current situation of each client and in this meeting team members have to present a weekly report of what they’ve done during the last week and what are the most pressing matters to be addressed with each client.
Mr. Smith also has a weekly call with each of the office’s clients to corroborate the information the team is giving him. By doing this, Mr. Smith keeps his team accountable for all activities they are engaged in, allowing him to maintain a transparent work environment.