Accounting policy (rules) in an organisation: Monday deliberations…

4 February 2019

Accounting policy (rules) in an organisation: Monday deliberations…

Audit Partner at RSM Poland

A lot has already been written about the accounting policy: that it must be in place, about what it must include, etc. You can read more about it not only in press articles, but first and foremost at the source, either in the Accounting Act (Article 10) or in IAS 1 or IAS 8. Hence, this is not something I am going to address here. And we are also not going to focus on the liability of the entity’s manager for not having the policy in place or failing to update it; a lot has also been written about fines/penalties, articles are devoted to this topic on our blog for example. Today we will briefly discuss the goals behind the accounting policy that should be fine-tuned to the implementation of the tasks defined for the organisation, thus helping to ensure conditions conducive to the development and long-term operation of the entity.

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Over the last two decades, it has been a common practice for companies to make every effort to attract attention or create an aura of a great employer; to reach this goal, many companies have more than just a wonderful logo, but most of all a vision and a mission, proudly presented in their seat so that any employee or client who comes to visit could notice it and see the values that are being cherished in this company (at least in theory). Websites are used as a lure, as well. Right, after all, the aim is to streamline the company value, e.g. through increased revenue and winning new customers (one would like to say: satisfied customers). The attitude towards the customer, business, appropriate sales, post-sale care, appropriate purchase chain, streamlining, granting bonuses, equipment for the staff and the office, legal services, etc. are just some of the slogans-priorities in a working organisation.


However, very few people note that financial reporting is what connects the aforementioned fields, and if used well, it allows you to present and merge the effects of operation, figures and descriptions in a splendid way. Financial statements, increasingly appreciated and used by stakeholders, can be a genuine flagship of a reliable company, right next to an excellent sales process, streamlined supply chain, staff or a stunning and memorable trademark. It may be an indication of an appropriate financial level of managerial staff who perceive the organisation holistically as a living organism and understand the needs of financial and accounting services in the area of reporting. Quality financial reporting, confirmed by an unqualified opinion of an auditor, seals the victory, proving that the information flow in the entity is flawless, the underlying aim of reporting is understood and the business is correctly reflected in the financial statements.

How to make financial reporting reflect sales, obligations of the organisation, transfer of benefits and risks to the customer, purchases, granting discounts, effects of concluded contracts on the right-of-use assets, etc.? How to determine if a given aspect is important for the company or not? Answers to these and many more questions should be found precisely in the accounting policy, being a collection of up-to-date rules and guidelines which every organisation should have in place from their very first business transaction and which should be the guiding light leading to quality financial reporting, a quantified flagship of the organisation…

And what should we do and what should we focus on if we do not have any accounting policy, if it has been implemented only for the sake of it, or if it is very out of date (the last update was made, for example, 15 years ago … and we do come across such accounting principles in organisations quite often)? We are going to elaborate on this in the upcoming post.

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Audit Partner

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