Liability ends with the preparation of the accounts. Uses financial records and statements on a sample basis.Ĭarried out by an external person or independent agency.Īccountants are appointed and removed by the management.Īuditors are appointed and removed by the shareholders.įinancial statements, i.e., income statement or profit and loss account, balance sheet, cash flow statement, etc.Īccountants can make suggestions for improving the accounting and related activities.Īuditors usually do not make suggestions. To determine the correctness and accuracy of all the recorded transactions.Īccounting is done daily, as transactions happen on a daily basis.Īuditing is a periodical assessment and is done on a monthly, quarterly or yearly basis.Īccounting starts at the end of bookkeeping.Īuditing starts at the end of accounting.Ĭoncentrates on the current financial activities and transactions.Ĭoncentrates on the past financial statements.Īll records, transactions and statements having financial implications.Ĭaptures all details related to financial records and transactions. To determine the profit and loss or the financial position of an organisation for a period. Key Differences Between Accounting and Auditing ParticularsĪccounting is the process of classifying, recording, interpreting and summarising the financial statements and transactions to determine the actual financial position of an organisation.Īuditing is the process of examining the financial statements and records of an organisation to find discrepancies during the process of recording of transactions and to verify the accuracy of the records.Īccounting is done with the purpose of reflecting the actual position, performance and profitability of the business or organisation.Īuditing is done to verify the accuracy of records and statements presented by accounting.
They strive to ensure that the financial records and statements are prepared with accuracy and provide a fair reflection of the financial position of an organisation. They can also have the same bookk e eping methods, such as cash or accrual basis. Usually, the procedures for activities in accounting and auditing such as tax compliance are similar. They use essential techniques and procedures of computation, book-keeping and analysis to compile financial reports and statements. They are generally done by persons with an accounting degree. Accounting and auditing need a thorough knowledge of accounting principles and basics. Most of the basic processes of accounting and auditing are similar. Similarities Between Accounting and Auditing External audit is conducted by an external auditor who is appointed by the shareholders. Internal audit is an audit conducted by an internal auditor, generally an employee of the organisation. The auditors, usually external persons or entities, carry out the process of auditing under the provisions of the applicable laws on behalf of regulators or shareholders.Īuditing has two main categories, i.e., internal and external audit. It involves carrying out the inspection and statutory audit of the financial statements.Īuditing gives an unbiased and fair opinion on whether the financial records and statements provide a fair and true reflection of the actual financial position of the organisation.
Auditing is carried out after the final preparation of the financial accounts and statements. Auditing:Īuditing refers to the examination of the financial statements or records of an organisation. The accounting reports help the management to make informed business decisions. Accounting is categorised into various branches, such as, cost accounting, financial accounting, management accounting, etc. The financial statements used in accounting are a brief summary of financial transactions over an accounting period. It is the process of recording financial transactions of a business.Īccounting of an organisation is usually done by its own employees. Accounting refers to the process of capturing, classifying, summarising, analysing and presenting the financial records, transactions, profitability, statements and financial position of an organisation.
What are Accounting and Auditing? Accounting:Īccounting is one of the key functions of a business.
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