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Nov 17 2012

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Difference between Accounting and Auditing

  • Accounting is recording of all the day to day financial transactions in the books of accounts leading to preparation of financial statements. On the other hand, Auditing is the critical examination of the transactions recorded in the books of accounts and makes a reasonable assurance.
  • Accounting is concerned with finalization of accounts and ready to make financial statements. On the other hand, Auditing is concerned with establishment of reliability of financial statements by making a reasonable assurance by auditors. 
  • The objective of accounting is to ascertain the trading results of financial transactions. But the objective of auditing is to certify the correctness of financial statements prepared by the management.
  • Accounting starts when book keeping ends. On the other hand, Auditing begins when accounting records.
  • Accounting involves various financial statements for example, balance sheet, income statement, cash flows statement. Whereas, auditing depends upon the agreement or upon the provisions of law adopted by the regulatory authority.
  • Accounting involves maintenance of books of accounts.  And Auditing is more than maintenance of books of accounts.

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  • Raphael Dandyson

    The fourth point needs to be reviewed, and the sixth too looks more like filling up spaces.
    If i can understand better, it is not the role of Auditing to prevent errors but accounting because the auditor is compelled to work with methods of financial analysis which the company operates upon but it has been seen to be the auditors’ responsibility practically.