Many people often use the terms ‘accountant’ and ‘auditor’ interchangeably, as both professions require similar skills and knowledge in accounting, bookkeeping and data analysis. However, it is vital to understand the key differences between these two roles. Let’s get started.
What is An Accountant?
Small business accountants are responsible for managing a company’s financial transactions on a daily basis. They analyse raw data and create various financial statements for the company they work for. They are typically employees of the company and work regularly. An accountant needs to maintain accurate records of transactions to facilitate future tax filings. There are different types of accounting, and you can choose what your business needs.
What is an Auditor?
In contrast, an Auditor is appointed to audit a company’s books. They analyse the financial statements created by an accountant and check for any inconsistencies or discrepancies. Even minor errors in the records may indicate that the accountant was not vigilant in maintaining accurate records.
Therefore, while both professions share similar skill sets, they serve different purposes. Accountants for small businesses manage a company’s financial transactions on a daily basis, while an auditor considers and verifies the accuracy of the financial records.
Difference between an Auditor and an Accountant
|An accountant is responsible for recording, categorising, analysing, and summarising several business transactions of the business.||Auditors are responsible for examining all financial books created by the accountant and checking the accuracy and viability of the financial books.|
|The accountant aims to search and maintain a record of all finances and showcase a complete financial picture of the business. It would include checking out the financial status of the company, its profitability, etc.||The auditor aims to establish and add to the authenticity of the financial reports of the company. It involves rechecking financial statements created by the accountant.|
|Accountants have to work daily. They need to check all the data daily to prepare financial books.||Auditors are responsible for auditing periodically in case of suspected fraud.|
|Accountants usually report to their clients or employers.||Auditors usually submit reports to legal entities or shareholders.|
|Most commonly accountants work for one company.||On the other hand, auditors may audit various organisations.|
|Accountants provide you with an income statement, balance sheet, and cash flow statement.||Auditors are responsible for submitting an audit report.|
|Usually, accountants suggest to their clients how they can improve their financial condition.||Auditors report on whether the data is correct and compliant or not.|
|Accountants create all financial reports of the company and these reports are helpful in understanding the financial health of the company.||The auditor makes sure to examine every detail of the financial books. This examination ensures the accuracy of the books.|
Similarities between An Auditor and an Accountant
- Auditors and accountants both need an understanding of accounting processes and procedures and must have an accounting degree.
- Auditors and accountants work together to make sure the records of the company reflect its financial status accurately.
Sometimes, auditing is a part of accounting. Both focus on checking the financial situation of an individual or a business, but with different purposes. Accounting gathers and shows financial information while auditing makes sure that it is legal and correct. Don’t forget to hire qualified accountants and auditors for your company because only professionals can perform accounting and auditing tasks.
Which One Do You Need: Auditor or Accountant?
Generally, accountants are responsible for preparing financial statements and accounting reports. Sometimes, they make recommendations to the management. The auditor examines the financial records to ensure that there are no errors and records are accurate. Therefore, if you need someone to prepare your financial reports, you can seek help from accountants. On the other hand, if you need someone to examine your financial records, you can reach an auditor.
Accountants and auditors offer related benefits in different ways. Both professions are vital for increased transparency, risk management, and data-driven decision-making. Both offer business owners a clear view of the financial position of a business. If you need accounting solutions for your company, you can speak to Reliable Melbourne Accountants.