What is the Difference between an Auditor and an Accountant?
13

Mar 2019

The professions of an Accountant and an Auditor are very similar to each other, and the terms are often used in place of one another. Both the accountant and the auditor require the basic knowledge of accounting and bookkeeping and need analytical and computational skills. This causes people to confuse between the two and use these terms instead of each other, which is a wrong practice. Let’s go ahead and find out the differences between the two professions.

Who is an Accountant?

An Accountant is a professional who takes care of the daily financial transactions of the company or the business. He deals with the company raw data, analyse them and then create the various financial statements for the company. He is usually the employee of the company for which they work, and they work daily. Maintaining a record of the transactions will help in filing for Value Added Tax in the future.

Now let’s see who an Auditor is.

Who is an Auditor?

An auditor is a person or a firm, usually a third party, which is appointed to check all the books of the company to check for any inconsistency. An auditor will analyse the books which have been created by an accountant and will check everything for any variations and then generate an audit report by his scrutiny. Even a small variation in the books would mean that the accountant was not vigilant and was not properly keeping the books.

The Differences between an Accountant and an Auditor

In the world of Accounting, the term Accountant and Auditor hold different responsibilities. For better clarity, read below.

Accountant

Auditor
  • An Accountant is a person who has the responsibility of recording, classifying, summarising and analysing the various business transactions of the business.
  • Auditors are the people who examine all the financial books created by the accountant and figure out the viability and the accuracy of the financial books.
  • The objective of the accountant is to search and record all financial data and paint a complete financial picture of the business. This would include figuring out the financial position of the company, its profitability, etc.
  • The objective of an auditor is to establish and add to the credibility of the financial reports of the company. This includes the rechecking of the financial statements prepared by the accountant.
  • Accountants of a company have to work daily. They are required to analyse all the data daily which would help them to make the financial books.
  • Auditors perform an audit of a company periodically after any specified case such as suspected fraud.
  • The accountants need to adhere to the Accounting Standards which are issued by the International Accounting Boards and Generally Accepted Accounting Principles.
  • The International Auditing Boards regulates the work of the auditors.
  • Hiring an accountant is a necessary service and a requirement for the business. Every business needs a good accountant.
  • The hiring of an auditor can be optional. If the accountant does next to no mistakes, there will not be any need of an auditor.
  • An accountant creates all the financial books of the company at the end of the quarter. These books are required to understand the financial health of the business.
  • The auditor will conduct scrutiny of every minute detail of the financial books created by the accountant. This Examination of the books will help in the accuracy of the books produced.
  • Since the company hires the Accountants, they have their separate department and fixed working space in the company.
  • As soon as the audit of the financial books is concluded, auditors move on to the next company.
  • Bookkeeping acts as the initiating point of accounting as recording and maintaining the financial transactions of the company will be utilized in preparing the financial statements of the organization.
  •  Auditors can only start their work if the work of the accountants is over. After they prepare the financial statements, the auditors re-check them for any discrepancies.

The professions of Accounting and Auditing are interconnected. When an Auditor validates the job done by an Accountant, then only it is understood that the accountant presents reliable data, whereas an Auditor cannot start his work before an accountant finishes his work. Thus, it can be established that both accountants and auditors are necessary for any business.

If you are looking to start a business, then hiring an accountant is one of the most critical steps to be taken by you. If you want accounting and bookkeeping services for your business, then JAXA is here to assist you.

We at JAXA, provide accounting, bookkeeping and auditing services to help your business grow and reach its full potential. Apart from the core domains, we also offer various other services which can help your business to improve more and work efficiently. For more details on the various services we provide do contact us – we’d be happy to help.