When the accounting process concludes, auditing commences with the aim of determining the accurate and fair image of the books of accounts. It is an activity of record keeping and the production and presentation of the financial statement. Accounting is used by organizations to keep track of their monetary transactions. It is the language the company knows, since it is the tool for reporting financial accounts of the corporate organization.
Conversely, auditing is the practice of verification and examination of financial statements. It aims at examining and validating the validity of financial books created by the accounting personnel of the organization. Thus, it assesses the quality and credibility of accounting information.
Go through the content offered to you, to comprehend the difference between accounting and auditing.
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Content: Accounting Vs Auditing
- Comparison Chart
- Key Differences
basis for comparison.
Accounting means systematically keeping the records of the accounts of an organization and preparing financial statements at the end of the financial year.
Auditing means inspection of the books of accounts and financial statements of an organization.
Standards on Auditing
Work performed by
to show the performance, profitability, and financial position of an organization.
To reveal the fact that the financial statement of an organization gives a true and fair view.
Accounting starts where bookkeeping ends.
Auditing starts where accounting ends.
Accounting is a continuous process, i.e., day to day recording of transactions is done.
Auditing is a periodic process.
Definition of Accounting
Accounting is a specialized language of business that helps to comprehend the economic actions of a firm. It is an act of orderly capturing the day to day monetary transactions of a business and classifying them into various groups. With that, the transactions are summarized in a way that they can be easily referred to at the time of urgency, analyzing and understanding the results of the financial statement and finally communicating the results to the interested parties.
Definition of Auditing
An audit is a methodical technique of independently reviewing the financial facts of an organization with the objective of delivering an opinion on an accurate and fair perspective. Here, organization refers to all the entities, regardless of their size, structure, type, and form.
Accounting is a critical, unbiased assessment of each and every component of the transaction; i.e., vouchers, receipts, account books, and associated documents are reviewed, in order to recognise the legitimacy and dependability of the financial statement.
The Key Differences Between Accounting and Auditing
The points mentioned below clarify the distinction between accounting and auditing, in detail:
Accounting is the art of orderliness, keeping records of monetary transactions and preparing financial statements for an organization. Auditing is an analytical activity that requires the independent examination of financial facts to give a judgment on a truthful and fair view.
Accounting is controlled by Accounting Standards, whereas Standards on Auditing regulate auditing.
Accounting is a simplified activity, which is conducted by the Accountants but Auditing is a hard process, hence Auditors are necessary for executing it.
The major goal of accounting is to disclose the profitability situation, financial condition, and performance of the firm. Conversely, auditing is to examine the validity of the financial statement.
Accounting is a continual task. Unlike auditing, which is a recurring task.
The end of accounting is the commencement of auditing.
Accounting and auditing are both specialist areas, but the scope of auditing is greater than accounting since it demands a complete study of numerous acts, tax regulations. Knowledge of accounting standards and standards on auditing, as well as communication skills, are also essential.
Apart from that, confidentiality, integrity, honesty, and independence are the key characteristics that have to be kept when completing the audit method. The reports produced by the auditor are beneficial for the users of the financial statements like creditors, shareholders, investors, suppliers, debtors, consumers, government agencies, etc. for logical decision making.