The Rewards of Recording: Role of an Accountant in the Success of a

Business

A Case Study

Presented to Dr. Alicia L. Padua

Faculty of Senior High School Department of

Philippine Institute of Quezon City

By

Gutierrez, John Allister C.

Jacinto, Ellijah Rome R.

12 - ABM

In Partial fulfillment

of the requirements in

Inquiry, Investigation, and Immersion Subject

March 2019
 ACKNOWLEDGEMENT

First of all, we would like to thank God, for giving us the understanding,

perseverance, patience, and determination to complete this research.

We would like to show our gratitude to our teacher, Dr. Alicia L. Padua, for

guiding us in conducting this research. Her valuable suggestions and perceptive

criticism played an important role in our research. We will always remember her

teachings wherever we go.

We would also like to show our gratitude to Mrs. Ella San Pedro for taking the

time to answer our questions and providing her knowledge to us. Her answers provided

vital information and data in our research.

We would also like to show our gratitude to our parents for their constant support.

They gave their assistance in every aspect in which they could help.

ii
 ABSTRACT

Any business must be able to properly handle the records of their finances, no

matter how large or small the amount is. Should there be any error in the records, this

could be disastrous to the company. This is where an accountant plays in. As an

accountant, they are the ones with the duty of handling the different financial data a

business needs. With the numerous data, there are two types of accountants that a

business can coordinate with for the data, the internal or external, and both can be seen

in most businesses, even Deutsche Motorgeräte Inc. This study was conducted to

determine how an accountant contributes to the success of a tool-distributor business,

either internally or externally. This study used a case study as the research design. The

interviewee was Mrs. Ella San Pedro, an accountant who works at DMI. She was

interviewed regarding the difference between internal and external accountants, how an

accountant contributes to the success of a business, the problems of an accountant,

and how one defines the success of a business. Her answer were then recorded,

categorized, and discussed.

iii
TABLE OF CONTENTS

TITLE PAGE i

ACKNOWLEDGEMENT ii

ABSTRACT iii

TABLE OF CONTENTS iv

INTRODUCTION 1

Statement of the Problem 3

REVIEW OF RELATED LITERATURE AND STUDIES 4

What is Accounting 4

Internal Accounting 4

External Accounting 5

Roles of an Accountant 5

Handle Financial Data 6

Prepare Financial Report 6

Provide Analysis and Advice

Based on the Data 6

Coordinate within the Company

for Financial Data 7

Problems of an Accountant 7

Continuous Learning 8

Online Technology 8

Technical Skills 8

Economic Problems 9

iv
 Successful Business 9

Synthesis 10

METHODOLOGY 11

Interview Questions 12

DISCUSSION 14

The Interviewee 14

Journey to Becoming an Accountant 15

Expectation and Reality of Working as an Accountant 16

Challenges of Being an Accountant 16

Roles and Responsibilities of an Accountant 17

Internal vs. External Accounting 17

The Meaning of Successful Business 18

Contribution of an Accountant to a Successful Business 19

CONCLUSION 20

REFLECTION 21

REFERENCES 22

APPENDICES

Letter of Request for Immersion Activity

v
 INTRODUCTION

Every business handles multiples financial data and files on a daily basis. From

average daily sales to the yearly expenses, a business must be able to properly handle

the different financial data. If handled incorrectly, a business could face different

problems such as lawsuits, bankruptcy, or criminal cases. This is where an accountant

comes into the scene. An accountant performs different financial duties related to the

collection, accuracy, recording, analysis and presentation of the financial data and

statistics of a business, organization or company. As an accountant, they are charged

with the duty of handling the different financial data a business requires. As such, the

performance and output of an accountant is crucial to the operations of a business.

With the the said roles and responsibilities, it would seem that anyone can

become an accountant. So why are accountants so important? While it is true that

anyone can learn the necessary skill set, the hard work and effort gone into learning the

said skills is not found in everyone. According to Agarwel (2018) accountant face a

multitude of problems like repetitive work, constantly changing standards,

understanding the technical know how, and so on. Another reason why accountants are

important is the lack of professional accountants. According to the Board of Accountants

(BOA), only 30 to 40 percent of takers pass the exam and qualify to get the certification.

As seen here, it is difficult to find certified accountants.

The importance of an accountant does not change by location, as all businesses

need the correct recordings of their financial data. However, there is an increasing
 2

demand of accountants here in the Philippines. One of the reasons for this rising

demand is the increased number of business starting up here in the Philippines.

According to the ASEANUP (2016) The Philippines has now become a dynamic

emerging market in the world due to it being able to capitalize on the efficiency of the

population with the English language and overseas workers. Due to this rise in

businesses, the demand for accountants have reached an all time high. Nonetheless,

this demand still cannot be met due to the lacking numbers of certified public

accountants (CPAs) here in the Philippines. According to Joel L. Tan-Torres (2016),

Chairman of the BOA, there is a shortage in Filipino CPAs, given the local and overseas

demand for this kind of profession. He further explained only 7,500 to 8,000

accountants are certified each year in the Philippines, with a majority of them finding

work abroad, majority in the Middle East and Singapore. The Philippines is only able to

produce a small number of CPAs, some of them still leaving to work abroad.

As said, accountants are very important to a business, they are the ones who

handle financial problems in the business and makes sure the flow of the business goes

well, and Deutsche Motorgeräte Incorporation is also a business which needs

accountants. Deutsche Motorgeräte Incorporation (DMI) is a tool-distributing business,

the only distributor of STIHL and Viking products of Germany based in the Philippines.

As a main distributor here in the Philippines of STIHL, they strive to uphold the values of

their mother company, which is “Always finding a solution. Making work easier for

people.” The business has been striving to maintain the peace between the farm
 3

owners and workers, which has been done through the different innovative tools

produced by the business.

An accountant is crucial to the success of a business. They are tasked with

multiple duties that are important to the business, some of these including handling

taxes, collating and interpreting financial data, analyzing the financial situation of the

company, and so much more. It is for the reasons stated above that the group has

decided to conduct a case study on the roles and responsibilities of an accountant.

Statement of the Problem

The study seeks to determine how an accountant contributes to the success of a

tool-distributor business, either internally or externally.

Specifically, it seeks to answer the following questions.

1. What are the key differences in the output of an internal and external accountant?

2. How does an accountant contribute to the success of a tool-distributor business?

3. What are the problems that an accountant faces in his/her performance of duties?

4. What are the factors that determine the success of a tool-distributor business?
 REVIEW OF RELATED LITERATURE

In this chapter, the researchers collected and discussed related literature

and studies to help the readers better understand the topic and the specific details. This

includes the definition of accounting, internal accounting, external accounting, the roles

of an accountant, the problems of an accountant, and the definition of a successful

business.

What Is Accounting

According to Kagan (2018), accounting is a systematic snd comprehensive

recording of financial transactions in relation to the business. Breaking it down further,

accounting is the process of noting, summarizing, analyzing, and reporting of all

financial actions done by a business. Accounting is a vital instrument within a business

as it allows for business to track the flow of their finances and make decisions based on

the data. Quite often, the accounting for small businesses is done by either a

bookkeeper or accountant, while large business go to auditing firms or finance

departments. Under accounting, there are two types which are internal and external

accounting.

Internal Accounting

According to Putra (2008), internal accounting is the accounting related jobs and

duties that are handled by employees within the company. Internal accountants are the

first to see and analyze the financial data. After the data is collected and recorded, it is

then processed and interpreted so that the management can make business decisions.
 5

Internal accounting also offers advice and analysis, to make sure that the decisions

made by the management are in line and related to the financial data. According to

AccountingSimplified (n/d) the primary users of the data produced by internal

accounting are the owners and manager. Owners make use of this data to monitor the

profitability of the business. Managers decide on actions for the business based on the

data provided.

External Accounting

According Wilkinson (2013), external accounting is the financial analysis and

audit of business done by a party outside the business. Often times, companies seek

the aid of external accounting for two primary reasons, to know if the internal

accountants are already pre-occupied or there is doubt with the output of the internal

employees. External accounting is done in order to recheck the data produced by

companies, and way to ensure the validity and reliability of the data. According to

AccountingSimplified (n/d), the primary users of data produce by external accounting

are investors, lenders, governments, and the public. Investors and lenders seek the

data produced by external accounting as to check if their money will be properly used

by the company they give it to. Governments are strict with this data as to check if the

business is breaking any law or committing crime. And finally, the public sometime

check the data as to judge if the business is reliable and worth spending on.
 6

Roles of an Accountant

Generally, an accountant records, collects, analyzes, and reports on financial

data. Accountants perform financial functions related to the collection, accuracy,

recording, analysis and presentation of a business. According to Davis (2018), an

accountant usually has a variety of administrative roles within a company's operations.

In a smaller business, the role of an accountant may consist of financial data collection,

entry and report generation. A job of an accountant does not only focus on financial

matters in some businesses. Accountants utilize their different skills in the following

tasks

Handle financial data

According to Davis (2018), primary roles of an accountant usually involves the

collection and maintenance of financial data. In this role, the accountant makes sure

that the records are fully in compliance with the laws, and procedures and policies are

followed.
 7

Prepare financial report

According to Sandilands (n/d), financial reports are ways of informing directors,

shareholders and customers of their progress, the current state of the firm and its

financial position. Accountants prepares financial statements that may include monthly

and annual accounts based on the financial information that is compiled. The

preparation of financial management reports requires an accurate quarterly and year-

end closing documents.

Provide analysis and and advice based on the data

According to Beers (2019) accounting analysis is done by doing a thorough

examination of each account and giving interpretation on the said account. Analysis is

always needed after every financial report. Analysis of the data helps in making

decisions for businesses. These decisions include which kinds of supplies to order,

payment of bills to payroll, and many more. Analysis of the financial reports is important

since it is for the benefit of the business. The analysis can help guide owners, investors,

and shareholders on deciding the plans and policies of the business for the future.

Coordinate within the company for financial data

According to IEduNote (2017), accounting gives the management the information

regarding the financial position of the business, such as, profit and loss, cost and

earnings, and liabilities and assets. Seeing as these are the different data that

accountants use, it is required of them to coordinate and communicate with the different
 8

people in the company to be able to get the needed data. Accountants must be able to

receive the correct data from the different people of the company to ensure that each

financial accountant is recorded.

Problems of an Accountant

In the eye of the public, the job of accountants is viewed as the simple addition

and subtraction of numbers. While this is a part of their duty, the tasks done by

accountants are multiple, as discussed previously, and often quite complicated.

Accountants face numerous problems while conducting their day to day tasks.

According to Outbooks (2010), the top challenges faced by accountants are the

following

• Continuous Learning

According to Colquhoun (2018), in an interview conducted with the director of

Linkedln of Australia, Matt Tindale, Tindale stated that “Accountants cannot rest on

the knowledge they have gained, because it is never enough.” Because of constant

change in laws, and of the skills that cannot be taught in classrooms, accountants

must always be learning new things as to ensure that the output they produce is up

to date and relevant to the world around them

Online Technology

According to Economia (2014), “With the rise of new technology, business

owners are choosing to forego hiring of human accountants, and are choosing to
 9

leave it all to softwares and online sites.” While technology has been a huge aid to

the jobs of accountants, humans still play an integral part in the accounting process.

Actual employees are still able to provide insight and expertise in accounting that

softwares and computers cannot provide.

Technical Skills

According to May (2018), “The skills for the job of accounting encompasses more

than just being able to crunch numbers and generate financial reports.” While these

two tasks are essential when doing accounting, the job of an accountant does not

stop there. Accountants must be able to spot mistakes and errors with the data

provided to them, as wrong data would be disastrous should it be used in generating

reports. Accountants must also be able to comply with the different requirements

asked for by the different users of the reports, like the owners, employees,

government, investors, creditors, and others.

Economic Problems

According to CaseWare (2018) “When countries make large scale decisions, an

example being Brexit, the whole nation is affected.” When a nation makes a big

decisions, it is unavoidable that businesses will be affected by this, which in turn

also affects accountants. Decisions that affect the nation often shake the already

built foundations of businesses. Thus accountants must be able to quickly adapt to

these as to avoid the collapse of a business.

 10

Successful Business

According to Ahmed (2017) some key factors that determine the success of a

business are the finances, the influence, and management abilities of the company.

While there are multiple factors that can define the success of a business, these are

some key determinants in checking the success of a business. According to Park (n/d),

money is usually used to build up new businesses or even to invest in different markets.

Through this, finances are seen as a key part of a company, as without this, a company

would not be able to start projects, pay employees, or continually produce their

products/service. According to Bailey (n/d), customer perception plays a vital role in a

company’s ability to attract new customers and to retain existing customers. Because of

this, influence is important to a company as it helps control customer perception

towards the company. According to Rietsema (2015), atrong leaders can help an

organization to maximize productivity and achieve business goals. Because of this,

management ability is important as leaders can help direct the success of the business.

Synthesis

Accounting is a crucial part of any type of business, small or large. Accounting

encompasses different types of duties that, if not done properly, could lead to major

problems for the business. With the vast sphere accounting covers, it is separated into

two major types, internal and external. Internal accounting includes the accounting tasks

done by employees in the company. External accounting includes the accounting tasks

done by employees outside of the company, often being just rechecking. However,
some general tasks done by either internal and external accountants are to handle

financial data, prepare financial reports, provide analysis and advice based on the data,

and coordinate within the company for financial data. These are some tasks that

accountants do on a regular basis, in their job in or outside the company. Along with the

difficulty in doing the said tasks, some problems that accountants face are related to

continuous learning, online technology, technical skills, and economic problems. These

are just some problems that accountants face along with the daily difficulties that come

in performing their day to day duties.

.
 METHODOLOGY

In any kind of business, an accountant holds multiple duties within a company,

ranging from small menial tasks to large financial decisions that could decide the future

of the company. It is for this reason that a case study was chosen to be conducted.

According to R. Heale & A. Twycross (2015) a case study can be defined as “an

intensive study about a person, a group of people or a unit”. This topic is considered as

a case study as it seeks to determine how the duties conducted by an accountant help

the success of a business. The topic of the case study was chosen to further discover

and elaborate the roles and responsibilities of an accountant, and how these duties

contribute to the success of a business.

While all companies house a variety of different accounting staff and those who

could describe the roles of an accountant, the researches have chosen to conduct the

case study at Deutsche Motorgeräte Inc. (DMI), a tool distributing company located here

in the Philippines. The company strives to uphold the values of their mother company,

which is “Always finding a solution. Making work easier for people.”. The business has

been relentless in maintaining a healthy relationship between the farm owners and

workers, which has been done through the different innovative tools produced by the

business. These tools allows the safety of the workers without sacrificing the output.

The case study was chosen to be conducted at DMI because it employs a very

experienced Certified Public Accountant (CPA). It is for this reason that the chosen

subject of analysis is a CPA from DMI named Ella San Pedro. She has been a CPA for
 12

over 20 years and is still practicing her profession to date. She serves as a CPA under

the company, Deutsché Motörgerate Inc. She has been able to guide and teach other

employees in DMI in regards to the accounting aspect. With her years of practicing her

profession, she is knowledgeable in her profession, and has been able to observe DMI

and the success of the company. It is for these reasons that she was chosen to be the

subject of analysis, as a CPA with her experience would be able to provide vital

information on the different roles and responsibilities a CPA plays.

The method of data collection to be used will be interview method. This method

was chosen as to be able to gather a detailed explanation on the different roles and

responsibilities of an accountant, and how this helps a business succeed. The interview

schedule prepared consisted of a list of questions that would help determine the roles

and responsibilities of the subject of analysis. The interview schedule would serve as a

guide to be able to gather information on the topic of duties of an accountant, and how

these help aid a business to succeed. The interview schedule will include the following

questions:

1. Why did you take up accountancy as you course?

2. Where did you take up your course?

F: Did you choose this school or did others choose it for you?

F: Why was this school chosen?

3. As a child, did you imagine yourself doing what you are doing right now?

4. Do you enjoy what you are doing right now? Why or why not?

5. How was your experience studying towards to becoming a Certified Public

 13

Accountant?

6. What are the challenges you faced on becoming a Certified Public Accountant?

7. What is your position in the company?

8. What has been your experience working in this company as a Certified Public

Accountant?

9. Why did you choose to join this business?

10. What are the duties and responsibilities you hold in the company?

F: How do these duties and responsibilities contribute to the company?

11. Within the company, are you able to interact with internal accountants or external

accountant?

F: What are some key differences you noticed between them?

12. In your line of work, what challenges do you face on a regular basis?

F: How are you able to cope with these challenges?

13. In your assessment, is the company successful? How can you say so?

14. In all the time you have been working for the company, what insights have you

learned?

15. In your opinion, how do accountants contribute to the success of a business?

16. What advice can you give to those aspiring to be a Certified Public Accountant?

Observation will also be done within the company, which will include the state of

the workplace, the attitude of the different employees, and the treatment of the subject

of analysis towards the fellow employees.

 DISCUSSION

An accountant performs different financial duties that is important to the

business. A general overview of these duties are the recording, analysis and

presentation of the financial statements of a business As an accountant, they are

responsible for handling the different financial data a business requires. As such, the

performance and output of an accountant is vital to the success of a business.

In this chapter, the researchers will discuss the interview conducted with a

certified public accountant. The interview covered how was her to journey to becoming

an accountant, her expectations of being an accountant and the reality she now faces,

some challenges she faces as an accountant, the roles she has, her differentiation of

internal and external accounting, how she measure the success of a business, and how

her work contributes to the success of a business.

The Interviewee

The researchers interviewed Mrs. Ella San Pedro, a certified public accountant.

She studied at the University of the East, Manila under the course accountancy. While

accountancy is registered as a four year course, Mrs. San Pedro was able to finish the

course in only three and a half years. She was able to do so by taking the minor units of

the course during the summer. When asked why she chose to do so, she answered that

she "Wanted to already start working, the feeling of earning your own money, rather

than asking for the money." When asked if as a child, she imagined herself being an

accountant, she replied that "As a child, she wanted to be a detective."

 15

She had been previously employed under different companies, but is now

currently employed by Deutsche Motorgeräte Incorporated, a tool - distribution

business. She has been working for the company for 18 years, and is in charge of

generating, compiling, and sending financial reports to the government. When asked

how her experience has been working in the company, she replied "I am happy with my

current job, despite it being very hard with the multiple duties."

Journey to Becoming an Accountant

She did not choose to be an accountant but she was given an opportunity to be

one. The journey of being an accountant was not easy, her strategy to become a

successful accountant is that she sacrifice her other plans and manage her time only to

studying. Her journey on being a successful accountant was only for three and a half

years, on her journey there were many challenges and she was deprived of her sleep,

but that was all worth it for what she has become now.

This agrees with what Martinson(2018) said that “To be successful in any career,

you will need to make sacrifices. In passing the exams of any career it requires

dedication.” This also agrees with the statement of AICPA (n/d) which says that

“300-400 hours is needed for studying.” To be an accountant, one needs confidence,

must learn to trust in oneself. There is no shortcut, but with discipline and hard work,

anyone can excel.

 16

Expectations vs. Reality of Working as an Accountant

Her experience in working at DMI is not common for accountant, usually an

accountant generally analyzes financial transactions in financial statements and

business reports following accounting principles, standards and requirements. For her,

she does not only record, collect, analyze, and report on financial data, but also has the

work of a bookkeeper, which is to record financial transactions in chronological order on

a daily basis. Her experience in the company is not an aspiring CPA would want but with

her will to earn she was able to handle the work she has.

What she is doing is similar to the statement of Kagan (2018), who defined

accounting as “A systematic snd comprehensive recording of financial transactions in

relation to the business.” While she does do this, she goes beyond what is described in

her contract, which should only be rechecking of the financial statements.

Challenges of Being an Accountant

She went through different challenges being an accountant. Challenges such as

managing time, following rules, and being updated. Accounting requires hard-work, one

must be equipped for the hardships that will be given. When asked what was the

hardest part of her job was, she replied that “As an accountant, she is constantly

learning the new laws and systems that the government is releasing.”

Her statement of about the hardest part of her job agrees with Colquhoun (2018),

in an interview conducted with the director of Linkedln of Australia, Matt Tindale, Tindale
 17

stated that “Accountants cannot rest on the knowledge they have gained, because it is

never enough.” As the government, mainly the Bureau of Internal Revenue (BIR) is

constantly updating their systems, accountants must also stay up to date as to what

new requirements the BIR is asking for, as to avoid penalties.

Roles and Responsibilities of an Accountant

She handles the reports that need to be filed by the company to the government.

Some these reports include the tax documents, income and expense statements, SSS

and Pag-Ibig contributions, and many more. Because of the documents she needs to

prepare, she coordinates with the different accountants and departments as to get the

needed data.

Her work is an accurate description of what accountants do. According to Davis

(2018) "An accountant usually has a variety or administrative roles within a company's

operations." This agrees with the the work that she does, generating reports for the

governments while coordinating within the company for the needed information.

• Internal vs. External Accounting

She is able to do a mix of both internal and external accounting in

her line of work. The internal accounting she does is gathering the data within

the company, and then generating reports from the data. The external

accounting she does is filing the reports that is being requested by the

government.
 18

When asked what are some key differences between the internal and

external accounting, she answered that "Internal accounting is more concerned

with what happens within the company, while external is more concerned with

the requirements of the government."

Her definition of internal accounting agrees with the definition of Putra

(2018) who stated that "Internal accounting are the duties that are handled by

employees within the company." As internal accounting is concerned more with

the happenings in the company, it is done by employees who are within the

company. Her definition of external accounting also agrees with the definition of

AccountingSimplified (n/d) who stated that "The data produced by external

accounting is primarily used by the investors, lenders, government, and the

public." The reports that she generates is done in correspondence with the

requirements of the government. Thus, the government is the main concern of

Mrs. San Pedro in terms of external accounting.

The Meaning of Successful Business

According to her, should someone check the financial statements, the business is

defined as successful. She said that "The financial statements show that the company is

still alive and kicking." The finances of the company is still able to maintain the

operations of the company, and generate adequate profit.

 19

Her statement on how the measure of the success of a business is done agrees

with the definition of Ahmed (2017) who said that "Some key factors that determine the

success of a business is the finances, the influence, and management abilities of the

company.” Basing on the financial statements, the finances of the company are still able

to support the company.

Contribution of an Accountant to a Successful Business

When asked how her job as an accountant is able to help the success of the

business, she replied that ”As an accountant, she prepares the financial statements

needed for the government, at the same time for the owners as to analyze what next

step should be taken.” It is through the data that she collects, interprets, and analyzes

that the company can then assess what should be done next.

This agrees with the statement of Romero (2017) who said that “An accountant

takes all the information the bookkeeper provides and periodically turns that information

into a profit and loss statement.” It is from these statements that the management bases

decisions and choices for the future of the company. Without these statements, the

management could make decisions based on poorly collated data and would lead to

bad choices.
 CONCLUSION

In conclusion, the life of an accountant is no walk in the park. The duties of an

accountant do vary, as this is whether one is an internal accountant, who deals more

with the inner workings of the company, or an external accountant, who deals with the

external users of the company like the government. And to add to this, both

accountants, internal or external, do face a multitude of challenges, one of the biggest

challenges being the need to constantly learn new details in their respective duties as

the data must match the requirements of the people they are providing to.

Through their duties, they are able to contribute to the success of a business by

providing the necessary data needed for both internal and external users, internal users

commonly being the management team and external users commonly being the

government. Through this, a company is able to function properly and be successful,

being able to make decisions that can lead to the growth of the company
 REFLECTION

Throughout the study, the researchers were able to determine the roles of an

accountant and on how important he/she is in a business. The researchers were given a

glimpse on what an accountant experiences on a daily basis, challenges that he/she

receives and on how these challenges are solved.

The researchers realized how difficult it is being an accountant is. The challenges

they must face, on both becoming an accountant and the day to day challenges, are

numerous. While it may seem that these problems are menial, if not handled properly,

could lead to disastrous results, both for the accountant and the company. Looking

towards the bigger picture, the researchers realized that an accountant must be able to

handle the data properly, as one wrong move could lead to consequences from the

company or even from the government.

One of the greatest lessons the researchers learned came from another

challenge accountants face which is the need to continuously learn, as accountants

must be able to keep updated with the world around them. This has inspired the

researchers to persevere in their studies, constantly seeking for new knowledge