Accountancy & Auditing Differences

1. AUDITING

2. Meaning of Accountancy and Auditing
 Accountancy:- It is the process of recording ,classifying, summarizing and
interpreting all the financial transactions.
 Auditing:- F. R.M De Paula- An audit denotes the examination of balance sheet and
profit and loss account prepared by others together with books of accounts and
vouchers relating thereto in such a manner that the auditor may be able to satisfy
himself and honestly report that, in his opinion, such balance sheet is properly
drawn.

3. The difference between accountancy and auditing
POINTS OF
DIFFERENCE
ACCOUNTANCY AUDITING
1. Scope The scope of accountancy is
limited to the preparation of
financial statements
In auditing, the auditor is
concerned with the
checking of accounts.
2.Objectives The objectives of accountancy
is to know the financial result
and financial position.
The objective of auditing
is to verify the truth and
fairness of the accounts.
3.Status An accountant is an employee
of the organization.
An auditor is an
Independent outsider.

4. 4.Qualification Accounting work
requires no formal
qualification.
To be company auditor,
he should be qualified
chartered accountant.
5. Tenure of
service
Accountant is usually a
permanent employee of
the organization.
Auditor can be
changed from year to
year.
6.Knowledge in
other subjects
An accountant is not
expected to have
knowledge in other
subjects.
An auditor must have
good knowledge not
only in accountancy,
but also in other
related subjects.

5. 7.Ranking of activities Accountancy is not
dependent on auditing
work
Auditing can be started
only after the
completion of
accountancy work
8.Time period of work Accounting work is
carried out throughout
the year
Auditing is usually
carried out at the end
of the year
9.Professional control There is no professional
control over
accountancy
There are professional
rules and regulations
regarding the auditing
work

6. 10.Nature of work The nature of
accountancy work is
constructive
Auditing work ,on
other hands, is mostly
analytical
11.Submission of
report
No report is required
to be submitted at the
end of the accounting
work
A report on the final
accounts is required to
be submitted by the
auditor at the end of
his work
12.Accountabilitiy The accountant is
accountable to the
management.
The auditor is
accountable to the
shareholders.

7. THANK YOU