Often one of the first questions asked by people interested in pursuing a career in accounting is the difference between an accountant and an auditor.
If you are part of this category, don’t feel alone. While these two careers are almost the same and often confused, there are some noticeable differences between being an accountant and an auditor. We will discuss about them below.
Can You Be An Auditor Without Being An Accountant?
The answer is NO! Infact all auditors are accountants, but not all accountants are auditors. Auditing is a branch of accountancy, when you qualify as a chartered accountant, then you have to focus on a career path in accountancy. Other career paths include: taxation, bookkeeping, cost accounting, government accounting, etc.
It is the duties of Accountants to take care of the daily financial transactions of a company or business. The duties of accountants can cover various tasks which range from incoming earnings to outgoing payments. They may also be in charge of figuring payrolls and tax deductions, paying vendors, implementing cash, check and electronic payments, preparing tax returns and reconciling the books of a company at year end. The duty of an accountant may also vary depending on what type of accountant they are. For instance, Princeton Review states that the duties of a tax accountant are very difference from that of a management accountant and vice-versa.
What Do Auditors Do?
Auditors often perform the same tasks as accountants, although they also have very different responsibilities and job descriptions. The Houston Chronicle states that while auditors and accountants have similarities and differences, many companies use these two individuals interchangeably. So, after reading the above duties of an accountant and an editor, then the big question "what exactly is the difference between an accountant and an auditor"? The best answer to this question is that while both these professionals are responsible for the accounting processes of a company, an auditor is saddled with the responsibilities of reviewing the work of the accountant in an organization.
What is the Difference Between an Accountant and an Auditor?
Even though these two occupations are similar, there are several differences between an accountant and an auditor, some of them include:
- Accountants are usually employed by the company for which they work, while auditors are often hired from another firm to verify the correctness of the accountant’s work. Although not in all cases, an auditor generally has no financial connections to the company.
- Accountants work on daily basis, while auditors usually perform quarterly or annual accounting work. Auditors are hired by a company after a specific situation, such as suspected fraud.
- The work performed by accountants is governed by international accounting standards, but auditors’ work is regulated by auditing standards.
- Accountants are requirement for a business organization i.e, business needs accountants to carry our financial recording activities. however, hiring an auditor is an option.
- Accountants prepare financial statements for the company at end of the year. These accounting statements create a picture of the financial stability of the company over a period of time. An auditor will examine the financial statements prepared by an accountant and determine their accuracy.
- Because accountants are employees of a company, they generally have their own office or workspace. Auditors often move around from company where their services are needed to another company.
The Difference Between an Accountant and an Auditor in terms of Education
The educational requirements for accountants and auditors are almost the same. According to the U.S. Bureau of Labor Statistics (BLS), both of these occupations require a minimum of a bachelor’s degree in accountancy. Although, Some companies may prefer their accountants/auditors have master’s degrees, such as a Master of Science in accountancy or a Master of Business Administration with a specialization in accounting. There are several certifications available to graduates of this program such as Certified Public Accountant, Certified Management Accountant or Certified Internal Auditor, etc depending on the country.