When does auditing process start? Right when accounting process ends. This helps determine the purpose of the fair picture of books of accounts. Accounting is an activity of record keeping and helps both in the preparation & presentation of the financial record.
Accounting helps track the monetary transactions. It is a business language as it is considered a tool for recording a financial statement of the business entity. Auditing, on the other hand, is an activity which verifies the financial statement. It’s main aim is to check and confirm the authenticity of financial books which the accounting staff prepares for the enterprise. Thus, it checks and proves the validity and reliability of the accounting information.
The Chief Differences Between Accounting and Auditing
The points below can help differentiate between accounting and auditing, in detail:
· Accounting is an orderly way of maintaining the records of the monetary transactions and then preparing the financial statements of the company. Auditing is largely an analytical task which evaluates the financial information and independently expresses an opinion which is fair and true.
· Accounting Standards governs accounting, whereas the standards on Auditing governs the auditing.
· In comparison with auditing, accounting is a far simplified task. Accounting is as the name suggests is performed by the Accountants. Auditing is a much complex task and the task of auditing is performed by auditors.
· Accounting helps reveal the financial position, the profitability position and the performance of the organization. Auditing, on the other hand, helps check the correctness of the financial report.
· Accounting, unlike auditing, is a continuous activity. Auditing, on the other hand, is a periodic activity.
· Where the accounting ends the auditing begins.
Accounting and Auditing are both important in their own ways and specialised fields, but the scope of auditing is much more than accounting as it is a thorough and painstaking process. You need to understand and evaluate several things that include various tax rules, acts. Also, knowing in depth about both accounting standards and auditing standards as having proper communication skills is very important.
Apart from all the above points, there are several other points to consider and are required like integrity, confidentiality, honesty, and independence they are all to be maintained while you undergo the auditing process. When the auditor submits the financial report, it becomes helpful for a host of people such as investors, creditors, investors, debtors, suppliers, customers, government and so on for proper decision making.
Though auditing is considered more important, it would be foolhardy to consider accounting any less than auditing. There are several things which you need to keep in mind while conducting an accounting. It requires you to have complete and in-depth knowledge of all the accounting standards, conventions, principles, and assumptions too along with Companies Act rules and tax laws. The truth is auditing cannot be conducted alone, the procedure of auditing can only to be conducted when accounting outsourcing services are conducted prioperly so, accounting cannot be neglected by hook or by crook.