Similarities between Accounting and Auditing

The similarities between both an accounting and an audit require a thorough knowledge of accounting procedures and are usually done by those with an accounting degree.

An auditor will generally be an accountant who is “knowledgeable about the organization’s auditing procedures and processes.

Another similarity; both processes aim to ensure the company’s records accurately reflect its financial position.

There are significant differences in the methods, objectives, and parties responsible for the accounting process by which the financial statements prepared and the audit of the statements.,

Accounting methods involve identifying the events and transactions that affect the entity.

Once identified, these items are measured, recorded, classified, and summarized in the accounting records. The result of this process is the preparation and distribution of financial statements that conform to generally accepted accounting principles (GAAP).

The ultimate objective of accounting is the communication of relevant and reliable financial data that will be useful for decision making.

An entity’s employees are involved in the accounting process, and ultimately responsibility for die financial statements lies with the entity’s management.

The typical audit of financial statements involves obtaining and evaluating evidence concerning management’s financial statements to enable the auditor to verify whether the statements are presented in conformity with GAAP.

The auditor is responsible for adhering to generally accepted auditing standards in gathering and evaluating the evidence and in issuing an audit report that contains the auditor’s conclusion expressed in the form of an opinion on the financial statements.

The primary objective of auditing is to add credibility to the financial statements prepared by management.