What’s the Diff: Accounting v.s. Auditing

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Two important processes that deal with an organization’s financial transactions and records are accounting and auditing. According to accounting services in the Philippines, both have distinct objectives and responsibilities, but they both play significant roles in safeguarding a company’s financial health.

You can decide if you want to work in either of these financial fields by learning more about them. At the same time, if you’re a business owner, nuances between the two can help you decide on the services you need. The terms “auditing” and “accounting” are discussed in this article, along with their definitions, standards, and key similarities and differences.

Accounting Services

Accounting is a method for managing a company’s finances that aids in comprehending its day-to-day economic operations. A chief financial officer (CFO) or a company’s finance department typically appoints an accountant to perform in-depth analysis and accurate reporting on financial records.

An accountant can work as an independent in their own business, as a consultant or contractor for businesses or nonprofit organizations, or in a small, medium, or large company in the public or private sectors. Day-to-day operations, financial accuracy, and taxes are all topics of interest to accountants. An accountant, for instance, describes the current state of a person’s or a company’s finances so they could provide bookkeeping services in the Philippines too.

For financial analysts and accountants, credentials are extremely important. Although a recognized professional title may be required for entry-level accounting positions, advancement absolutely depends on it. There is a predominant professional certification for each career option. The title Certified Public Accountant (CPA) is given to accountants after passing the board exams. In the financial sector, this is probably the most well-known and respected professional designation.

Auditing Services

Examiners arrive behind bookkeepers and check the work they do. They check the accounting firm’s financial statements to make sure they accurately reflect the company’s financial situation. The financial statements that are required to be released annually by public companies are audited to ensure that they are prepared in accordance with generally accepted accounting principles (GAAP).

An auditor, like an accountant, can work for one company internally or for a third party, like a public accounting firm, to audit multiple businesses. Additionally, the Bureau of Internal Revenue (BIR) and other regulatory bodies employ a large number of auditors. They can go to your business and conduct inspections. To avoid receiving a BIR love letter or audit letter for investigating your business, it’s good to have advice from CPAs offering tax and auditing services in the Philippines.

A Deep Dive Into the Accounting and Auditing as a Profession

Both accountants and auditors play a big role in business. For big businesses that deal with a lot of money, even small errors can cost millions. Hence an accountant must be organized and detail oriented in tracking the numbers. When an auditor comes in behind you and finds errors, it is bad for you as the accountant of the business.

Hence, auditors must have strong investigative abilities and pay close attention to detail. A competent auditor is required to identify subterfuge, fraud, and intentional misstatements in addition to capturing honest errors. Preternatural detective skills are so useful for an auditor because the businesses that engage in such shady practices are typically successful at concealing their activities. Check out the nuances needed for accounting and auditing:

  1. Education

Although technically not required, the minimum educational requirement for accountants and auditors is typically a bachelor’s degree. Most auditors and accountants decide to become Certified Public Accountants (CPAs) as their careers progress. A lot of big companies would rather hire accounting and auditing employees who have already passed the CPA exam or who are eligible for the exam.

  1. Skills

Auditors and accountants need to be good with numbers. Since spreadsheets and calculators perform the majority of the math work, this does not necessitate a working knowledge of multidimensional calculus. But professionals must have a good grasp of numbers to complete tasks like tallying inventory, forecasting future sales, and preparing and reviewing financial statements. Notably, accountants and auditors frequently collaborate with one another.

  1. Starting Salary

For new accountants and auditors, the salary range is wide. Your level of education, location, and employer size, among other things, all play a role in determining where you fall on this continuum. Keep in mind that starting salaries in accounting and auditing are very flexible. This can be used as leverage to get a higher salary from your chosen employer if you have multiple offers.

What Does This Mean For You?

If you’re an accounting graduate looking for solid pay potential, better than expected employer stability, and a lot of vertical portability, you can check out our hiring page. We’ll help you explore options and find a career that is more fulfilling for your individual goals, personality, and skill set.

On the other hand, if you’re a business owner looking for a reliable accountant and auditor for your books, don’t hesitate to get in touch with our team. We offer accounting services in Pasig and beyond!