Accounting & Auditing can be differentiated on the basis of the following points.
Scope:
· Accounting is related with preparing financial statements.
· Auditing is concerned with checking financial statements.
Data:
· Accounting is related with current data.
· Auditing is concerned with past data.
Purpose:
· The purpose of accounting is to show performance and financial position of a business.
· The purpose of auditing is to certify true and fair view of financial statements.
Nature:
· Accounting is constructive in nature.
· Auditing is analytical in nature.
Time:
· The time period of accounting is usually twelve months (one year). It takes twelve months (one year) to complete records.
· The time period of auditing is less than one year. It may be completed within one month or may be more than one month.
Start:
· When the work of bookkeeper ends then the accountant work starts.
· When the work of accountants ends Then the auditor work starts.
Principle:
· The accounting principles include accrual, going concern, prudence and consistency.
· The auditing principle include independence, objectivity, full disclosure and materially.
Methods:
· Accounting process includes amortization, depreciation and valuation.
· The auditing methods include manual and computerized.
Techniques:
· Accounting methods include interest rate, depreciation rate, and installment payable.
· Auditing process include vouching, valuation and verification.
Rules:
· Accounting is not regulated by any code of conduct laid down by any institute.
· Auditing is governed by code of conduct prepared by institute of chartered accountants.
Necessity:
· Accounting is necessity of every entity having any size.
· Auditing is not the necessity of every business.
Cycle:
· Accounting cycle starts with journalizing and ends with final accounts.
· Auditing cycle starts with understanding clients system and ends with an opinion.
History:
· History or Background of business and accounting go side by side.
· History or Background of auditing is short as compared to accounting.
Report:
· Accounting work involves no report to any party.
· Auditing work requires separate report to owners.
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