Differences Between Auditing And Accounting

Differences Between Auditing And Accounting

Accounting is related to the collection, recording, analysis and interpretation of financial transactions but auditing refers to the examination of books of accounts along with the evidential documents. So, following differences can be shown between auditing and accounting:

1. Meaning

Accounting is the act of collecting, recording, analyzing and interpretation of financial transactions but auditing is the act of examination of books of accounts and evidential documents, so as to prove the true and fair view of profitability and financial position.

2. Beginning Of Work

Work of accounting begins when financial transactions take place but work of auditing begins when work of accounting ends.

3. Scope

Accounting prepares profit and loss account and balance sheet and other statements as per the instruction of auditor but auditor checks the books of accounts considering their fairness as well as complying with the provision of company act or not.

4. Nature Of Work

Accounting keeps the record of financial transactions but auditor checks and verifies the books of accounts.

5. Staff

An accountant is a staff of an organization and draws the salary from the business but an auditor is an independent person who is appointed for specific period and gets a sum of remuneration.

6. Preparation Of Report

An accountant does not prepare report after the completion of his task but he has to give information to the management when needed but auditor needs to prepare and present report after the completion of his work to the concerned authority.

7. Responsibility

An accountant remains responsible to the management but an auditor is responsible to the owners or shareholders.