Differences Between Accountancy and Auditing

Differences Between Accountancy and Auditing

Accountancy Vs Auditing

1. Meaning

Accountancy: It is the process of recording, classifying, summarising and interpreting all the financial transactions.

Auditing: It is the process of examining books of accounts and reporting on the financial statements.

2. Objectives

Accountancy: Its main objective is to find out profit earned or loss suffered by a company and to show the financial position of the company for a particular period.

Auditing: Its main objective is to examine the correctness of the accounts and financial statements and certify that whether the company exhibits a true and fair view of state of affairs of the concern.

3. Nature of Employment

Accountancy: An accountant is a permanent employee of the organisation.

Auditing: An auditor is an independent person and is not an employee of the organisation.

4. Qualification

Accountancy: An accountant does not require any formal qualification.

Auditing: An auditor should be a qualified chartered accountant certified by the Institute of Chartered Accountants of India.

5. Reports

Accountancy: Accountant is not required to submit the report on the financial statements prepared by him.

Auditing: Auditor should submit the report certifying the truth and fairness of the financial statements.

6. Remuneration

Accountancy: An accountant is remunerated in the form of salary.

Auditing: An auditor is remunerated in the form of professional fees.

7. Commencement of work

Accountancy: Accountancy starts where Book-keeping ends.

Auditing: Auditing starts where Accountancy ends.