Accounting and auditing are the two important activities of record-keeping both of them share differences and similarities still many use them interchangeably. Both accounting and auditing are crucial to represent the fair picture of books of accounting. Accounting is used to keep a track of financial transactions that took place in the firm or company. Many consider accounting as the business language or tool used to report monetary transactions to the business entity.

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On the other hand, auditing is the process of verification of the provided financial statement. The main motive of auditing is to check the authenticity of financial books prepared by the accounting staff. Thus, it evaluates the reliability of the accounting information. Let’s start from the beginning to know more about the difference between accounting and auditing.

What is the Accounting?

Accounting is a financial activity that incorporates the process of collecting, classifying, analyzing and summarising, and presenting the financial transaction or position of a business organization. Accounting is also known as the language of business.

What is Auditing?

Thea auditing refers to the overall examination of the financial records provided by the business entity. The auditing takes place after the completion of the accounting process or final preparation of the accounting statement.

Basically, the auditing revolves around the inspection of financial records or statements and giving a fair and unbiased opinion on whether the provided financial statement reflects the true status of the business or not. Auditing is an external task carried out by professionals.

Similarities between Accounting and Auditing

The basic process of both accounting and auditing is similar to both of the processes that required knowledge of accounting principles. Both done by a person who is familiar with the accounting concept and at least holds a bachelor’s degree in accounting. Another similarity in both processes is they use essential techniques and procedures of bookkeeping.

Both accounting and auditing are carried forward to ensure the financial statement and record represent the actual position of the business organization.

Difference between Accounting and Auditing

There are several differences that exist between accounting and auditing. While you can take assignment writing help on accounting to understand the mentioned differences:

Definition

Accounting is the keeping of records of financial transactions that took place within the firm or company.

Auditing is the process of analyzing the provided financial statement and give an opinion on fairness.

Focus

The main focus of accounting is to accurately represent the financial statement while on the other hand auditing focuses on providing the true picture of the financial position of the company.

Performed by

Accounting is performed by accountants and auditing is performed by professional auditors.

Status

In small and medium-size companies accounting is generally performed by the employees of the company but auditing should be carried out by the external individual who can provide an unbiased and fair opinion on the statement.

Period

Accounting is the continuous process as the day-by-day recording is done and auditing is the periodic process.

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