Accounting and auditing have some similarities between them which will be given in this article. But first, will start by defining the term “accounting” and thereafter, list the responsibilities of an accountant before moving to equally defining the term “auditing” and listing the responsibilities of an auditor from there, similarities between accounting and auditing will be discussed.
Accounting is the common practice of recording the assets, liabilities, and cash flows of a company. Accountants are responsible for analyzing financial data, advising on tax matters, forecasting financial results, creating various financial models in response to changing circumstances, and conducting tax transactions in accordance with financial rules, regulations, and laws. The specific responsibilities of an accountant are as follows:
- Preparing financial reports
- Ensuring compliance with tax laws and regulations
- Filing tax returns
- Predicting the outcome of tax decisions
- Providing financial management advice
- Knowledge of tax laws and procedures
- Identifying ways to reduce costs
Having defined what accounting is and briefly discussed the responsibilities of an accountant, I will now switch attention to look at what auditing is and equally, list the responsibilities of an auditor before looking at the similarities between accounting and auditing.
Auditing is a regular review of a company’s financial statements to identify inconsistencies and inappropriate practices. The auditor comes to check the financial statements after the completion of the work of the accountant. There are three types of audit: external audits conducted by external parties; Internal audits by internal auditors within the organization and Internal Revenue Service (IRS) audits by the IRS. Auditor work products focus on:
Making sure there is efficiency in accounting systems
Fraud detection and prevention
Planning and budgeting accuracy
Similarities Between Accounting and Auditing
- Require an in-depth knowledge of the fundamentals and principles of accounting.
- Usually performed by people with an accounting background.
- Both use basic accounting, calculation, and analytical procedures and methods.
- Both accounting and auditing aim to ensure that the financial statements and records fairly reflect the actual financial position of the organization.
While not technically a requirement, a bachelor’s degree is generally the minimum requirement for training accountants and certified public accountants. As accountants and chartered accountants advance through the ranks, most of them will choose to become certified public accountants (CPAs).
It is a deliberate policy for most large corporations to hire individuals who have already sat for and cleared their CPA examination before employing them, or that those already employed be eligible for the CPA examination.
Skills that accountants and auditors have in common include:
Accountants and CPAs must be able to produce written reports that are clear, accurate, and easy to understand.
To provide useful business advice, accountants must be able to focus on the details that make up a company’s overall financial position and keep accurate records. Accountants must be able to follow every step of the accounting process to detect inconsistencies, whether intentional or unintentional.
Accountants and auditors require great math skills, from simple to complex math operations.
In order to prepare and verify the accuracy of financial statements, accountants and auditors must be able to regulate the information they receive from others and the information they report.
Accountants and auditors must follow the programs and applications that businesses use to read and analyze data.
Accountants apply problem-solving skills when balancing books. Chartered accountants use these skills when investigating discrepancies and auditing completed accounting work.
In conclusion, while the two respective terms are different and their functions equally different, there is a number of things that these two have as can be seen from this article.
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