Today we will tell "What are accounting and auditing and what is the difference between them?". The first accounting is done after which the process of auditing is completed.

 The audit is used for the purpose of determining the correctness and fairness of the books of account. It is a type of method by which records of financial statements are kept, prepared, and presented. Accounting was used by companies to record their monetary transactions. So let's know in detail about both.

difference between accounting and auditing
difference between accounting and auditing

Accounting, which we know in English as Accounting, is a special technique of business by which it becomes easy to study the economic activities of the unit completely. 

The use of accounting is the main part of any business because by this the monetary transactions of the business can be arranged daily, as well as studying different groups of business separately, they can be arranged according to different areas. 

Through accounting, the transactions are kept organized in such a way that whenever a current situation arises, it can be easily referred to.

Some of the ways of doing accounting are as follows:

  • Maintenance of proper records through Journal, Subsidiary Books, Ledger, and Trial Balance.

  • Determining the results (profitability position) from the records maintained through trading, profit, and loss account.

  • To show the financial position of the entity through the Balance Sheet.

  • Providing necessary information regarding solvency and liquidity position to interested parties.

What is Auditing?

An audit, also known as auditing, is a systematic process of independently examining the financial information of an entity with the objective of giving an opinion on a true and fair view. The organization here refers to all entities regardless of their size, structure, nature, and form.

Auditing is a form of critical and unbiased examination of each and every aspect of the transactions, in which the vouchers, receipts, ledger, and other related documents are verified, so as to ascertain the validity and reliability of the financial statement at all times. Could And apart from this, errors and frauds or willful manipulation or malpractices in accounts, etc. can also be detected through detailed examination by audit. Which is the main reason for doing any audit.

Difference between accounting and auditing

Accounting is known as the process of recording, classifying, summarizing and interpreting financial transactions and statements in order to determine the financial position of an organization.Auditing is referred to as the process of examining financial records such as transactions and statements of an organization in order to find any discrepancies during the process of recording the transactions and to verify the accuracy of the records.
Accounting is done for the purpose of showing the position, profitability and performance of the business entity or organizationAuditing is done to verify the accuracy of the data presented by accounting. It is done with a view to revealing the extent to which a true and fair view of the records is maintained in the transactions
To determine the profit and loss of the organization for a period or the financial position of an organizationTo determine the correctness of all recorded transactions
Mode of operation
Accounting is done on a daily basis, as transactions happen on a daily basis for any businessIt is a periodic evaluation and is done monthly, quarterly or annually
Performed by
Accounting is done by an accountantAudit is done by an auditor
Accounting begins at the end of bookkeepingThe audit begins at the end of the accounting


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