Top differences between the process of accounting and auditing

March 17, 2023

When a company seeks to thrive in the competitive business world, it implements various steps to upgrade its functions. A company can give its best when its financial support is well-built. If you own a business, every department of your business matters as much as the other for overall success. Likewise, the financial department is of equal importance.

Have you ever thought about who may oversee the money matters of a business that runs locally or globally? The cash flow for any company is directed by the accounting or auditing team members. Both areas have a great influence on career opportunities. Those willing to pursue a profession in these fields can get a degree in commerce and later find relevant jobs for their career. You can also reach out to instant assignment help for a deep understanding of the subject. From now on you do not have to worry about any subject.

● Aims of both the disciplines

Accounting aims to provide you with information that concerns about financial health, profitability and performance of the company. On the other hand, the purpose of auditing is to determine whether the financial record provided by accounting is specific or not. Auditing can be a guide for you to maintain an accurate record of financial transactions.

● Types of accounting and auditing

Some of the types of accounting processes you need to be familiar with are financial accounting, managerial accounting, cost accounting, human resource accounting and much more. On the contrary to this, auditing focuses on one business vertical or function within the company. The auditing of your company will typically take place internally and externally. The internal audit is after improving compliance, and fiscal health, and the external audit serves to perform regulatory checks by the relevant authorities.

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● Key deliverables

When you work in accounting, your daily job will engage in delivering the transactions and records of the company’s corporate activities that involve the exchange of money. Similarly, as an auditor, you will be responsible for preparing and providing audit reports. Auditors can remark on the reports as qualified or unqualified.

● Scope

In general, accounting denotes the maintenance of an accurate book of accounts. It doesn’t go beyond this and primarily emphasizes making entries in account books. And later you can post these entries to the ledger, pass adjustment entries, maintain invoices and correct certain mistakes.

At the same time, you can pre-plan an audit in case of any contracts or the law. As a result, auditing intends to give an opinion on the reliability and accuracy of financial records and statements.

● Frequency

Companies have to record transactions regularly and you may need to update the record books fortnightly, monthly, or as per company regulations. Hence accounting is an ongoing process. Meanwhile, auditing takes place at fixed intervals and can be predicted in advance. Audits take place on a quarterly or annual basis depending on the company policies.

● Hierarchy

The accounting team is considered to be the middle management team where you manage the overall financial matter of the company. In some cases, internal auditors also take part in this business. On the other side, external auditors who are considered to be third parties are given higher authority during the audits. Working as an accountant of a company you may report to the auditors during the audits.

Which are the common skills required to be an accountant or an auditor?

Auditors and accountants entail the same skills to work as professionals in different industries. Similar skills that are required for you to become an accountant or an auditor are-

● Mathematics- For both positions, you need to master mathematics. Complex mathematical sums, formulas, problem-solving equations and basic calculations are compulsory.

● Communication- Communication is a task of imparting, you need to be precise in your communication skills to coordinate with the other departments.

● Attention to detail- You should observe all possible matters in a financial report to identify data entry errors and ensure that no mistakes are made.

● Problem-solving- You cannot ignore qualities such as problem-solving as it helps to investigate and solve problems regarding account book balancing.

● Digital skills- With the advancement of technology you also need to upgrade traditional methods of financial management to digital methods. There are special software and tools that you need to learn for modern solutions.

● Education- Auditing and accounting both expect their professionals to have a degree in commerce. To be specific in accounting you need to choose your specialization in accounting, bookkeeping, or finance. Besides, auditing will require you to complete certifications such as Institute of Internal Auditors, Information system audit and control association.

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