What Is The Difference Between Accounting And Auditing?
"I have been looking up finance jobs and I am very interested in becoming an accountant. I have also learned a little bit about auditing, but it seems very similar to accounting to me. I am a bit confused because I do not really understand the difference. I want to know if auditing is a type of accounting, another name for accounting, or another job altogether. This is way too confusing for me, and I am having a hard time deciding what to do."
asked by Michael from New York, NY
It is not unusual to be confused about the difference between accounting and auditing. Many people ask this question when they first start learning about financial fields. Accounting and auditing are two similar occupations which incorporate similar duties. Auditing is sometimes considered a subset of accounting, but often it is denoted as a separate occupation. The difference is largely one of level and organization.
Accountants are responsible for handling the day to day financial budgeting of an organization. An audit, by contrast, is typically an independent appraisal which is carried about by an independent organization. Some companies do employ their own auditors to oversee their accountants, but many bring in auditors from third-party firms.
Auditors analyze the records kept by a company’s accountants for accuracy and fairness. They help companies to ensure that they are performing within applicable regulations. Auditors then provide suggestions based on their findings. Usually auditing checks are run on a quarterly or annual basis, though some auditors do their work daily. Hotels, for example, often employ auditors who run the books every single night.
Organizations need auditors not only to make sure they are running their books efficiently, but also to ensure they are not making errors which could get them into regulatory trouble. Auditors can be very helpful when it comes time for tax preparation—so as to avoid unwanted audits from the IRS (on that note, many auditors work for the IRS—something else for you to consider).
As you might guess, many of the same job skills employed by accountants are also used by auditors in the course of their work. Auditors, like accountants, need to be good at working with numbers and handling large sets of detailed data. Both auditors and accountants need to be good at communicating with people as well, since both roles involve working with other department members so that all members of an organization can understand the reports which are generated.
That is why you should investigate the role of an auditor if you are interested in accounting work and vice versa. You may find that auditing has just as much of a draw for you as accounting. Researching both in depth will help you to understand the differences between these related, but distinct, occupations.
I recommend that you reach out to any accountants or auditors you know and ask them more about their work. An inside insight can really help you to make the right decision about which course to pursue.
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