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Accounting is the collection,compliation of financial data and collation in a specified format in compliance with the accounting standards ,regulations and Laws to arrive at the profitability and financial position of an organisation.
Auditing is an independent verification of the accounts so compiled as to the compliance with the standards , regulations and Laws.
Accounting is process of identifying, measuring, and communicating economic information to various users.
The main goal of accounting is to provide a company with clear, comprehensive, and reliable information about its economic activities and status of its assets and liabilities. This information is presented in the form of accounting reports like the balance sheet, income statement, statement of changes in equity (also called shareholders' equity statement), and statement of cash flows (also called cash flow statement). By means of accounting reports it is possible to perform the following (list non-inclusive):
Internal users of accounting reports are managers, owners, and employees. External users of accounting reports are investors, creditors, and government.
Audit is independent appraisal performed by an independent expert of an activity or event. There are operational, technical, ecological and other types of audit. Most commonly, nevertheless, this term refers to audits of financial statements.
Audit of financial statements is the process of examining the financial statements and the underlying records of the company in order to render an opinion as to whether the statements are fairly presented. Most commonly financial audits are performed on a company's request for the benefit of financial information users (i.e. internal and external).
Auditors analyze and compare accounting reports and confirmation documents as well as verify conformity of a company's accounting with established standards and regulations. Therefore, the main goal of an audit is to perform thorough evaluation of a company's financial records and reports and provide a company with improvement recommendations based on that evaluation.
As we can see, accounting provides financial information to users of such information, and auditing is a means to ensure such information is reliable and comforts with established rules and regulations.
Auditing is the critical examination of books of accounts to find accuracy. so auditing begins where accounting ends.
The main difference between auditing and accounting is that accounting is related to the collection, recording, analysis and interpretation of financial transactions while auditing refers to the examination of books of accounts along with the evidential documents. However, both processes are concerned with the accounting records of a business
Accounting encompasses reporting on the financial position of an entity. It is produced by management so to inform the end user the strength of the organisation, its future profitability or possible growth.
Auditing on the other hand deals with expressing opinion or confirmation or otherwise of the reports produced out of the accounting services and reporting there in to the interested user.
Both fields are executed in accordance with the best standards accepted globally and in colaboration with the standard set by residence of each institution or organisation.
Accounting is the process of recording, classifying and summarizing of the business events for the purpose of providing financial information to investors for decision making.
Auditing is determining whether recorded information properly to the business events that occurred during the accounting period. Its main duties are observe, valuate and recommend the financial statement and the firm.
