Difference Between Accounting And Auditing

Difference Between Accounting And Auditing

The main dissimilarities or difference between accounting and auditing can be pointed out as follows:

1. Meaning

Accounting: A process of identifying , classifying and recording the financial transactions in the books of accounts and preparing financial statement to show the profitability of the firm.

Auditing: Act of reviewing and inspecting the books of accounts to prove the accuracy of accounting process.

2. Beginning

Accounting: Accounting starts immediately after the monetary transactions take place

Auditing: It starts after the completion of accounting job

3. Performed By

Accounting: Accounting work is performed by the accounting staffs of the company

Auditing: It is performed by and independent auditor not having financial ties with the company.

4. Objective/Purpose

Accounting: To ascertain the net results (profit or loss) and to disclose the financial health of the company.

Auditing: To examine the financial statements to ensure the accuracy, reliability and validity of accounting task.

5. Process

Accounting: It is a daily process of recording business transactions.

Auditing: It is a periodical (quarterly, half-yearly, or yearly) of evaluating the books of accounts.

6. Regulators

Accounting: By Accounting Standards

Auditing: By Auditing Standards

  Also Read: 

Difference Between Accounting And Finance

7. Knowledge/Skill

Accounting: Accounting knowledge is required to maintain the books of accounts

Auditing: Both accounting and auditing knowledge is required to evaluate the books of accounts.

8. Categories

Accounting: Cost accounting, financial accounting, and management accounting

Auditing: Internal audit and external audit

Accounting Vs Auditing (Comparison Chart)

Basis For Difference	Accounting	Auditing
Introduction	Summarizing, classifying and recording business transactions in systematic manner	In depth review of books of accounts to ensure the accuracy of accounting system
Beginning	After the financial transaction	After the completion of accounting process
Performed By	Accounting Staff	Auditor
Objective	To know financial strength or weakness	To prove the accuracy and validity of accounting job
Process	Daily Process	Periodical Activity
Regulators	Accounting Standards	Auditing Standards
Knowledge Required	Accounting knowledge	Both accounting and auditing knowledge
Categories	Cost accounting, financial accounting and management accounting	Internal and external audit

I hope this post is helpful to understand the difference between accounting and auditing and to make comparison between them.