Let's start with the really basic details, the technical differences if you will. As similar as these two occupations are, there are several differences between an accountant and an auditor without even considering where to study.
- Accountants are usually employees of the company for which they work, whereas, auditors are often hired from an outside firm to verify the accuracy of the accountant’s work. Although not always the case, an auditor generally has no financial connections to the company.
- The work done by accountants is done on a daily basis, whereas auditors usually perform quarterly or annual accounting work. Auditors are often brought into 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 generally a requirement for a business; however, hiring an auditor is an option.
- Accountants create financial statements for the company at year-end. These statements create a picture of the financial stability of the company. An auditor will look over the financial statements and determine their accuracy.
- Because accountants work for a specific company, they generally have their own office or workspace. Auditors, on the other hand, often move around from company to company.
Now that we know the differences in the simplest of terms let's look a bit deeper shall we?
Accountants and Auditors have the same basic education
The educational requirements are almost the same for accountants and auditors, both of these occupations require the completion of a bachelor’s degree in accounting. Some companies may prefer their accountants/auditors to have master’s degrees, such as the 'Big Four' accounting firms, PricewaterhouseCoopers, Ernst & Young, Deloitte, and KPMG.
“Legacy accounting: Will you have been an asset or a liability on the world's balance sheet?”
- Ryan Lilly
In Ireland, all graduates in accounting want to work for these big four, who generally prefer their new hires to have taken and/or passed the Certified Public Accountant (CPA) exam. already or, at minimum, be eligible to sit for it.
So What Does an Accountant Do?
An accountant primarily provides in-depth analysis and accurate reporting on financial records, most often completed as a supporting role to a chief financial officer (CFO) or a company's finance department. Accountants also work directly with individuals to review financial records for tax filing for individuals or businesses.
"If you can't show through an audit trail how you arrived at the numbers on your balance sheet, that is a significant internal control failure."
- Robert Cobb
An individual trained as an accountant has the opportunity to work in a small, medium, or large company in either the public or private sector, as an independent in their own firm, or as a consultant or contractor to companies or nonprofit organizations.
Accountants create financial statements, which include the balance sheet, income statement, and statement of cash flows, for a company at year-end. These statements create a picture of the financial stability of the company. An auditor will look over the financial statements and determine their accuracy.
An accountant might perform, such as bookkeeping tasks, tracking expenses and revenues, forecasting future profits and cash flows, and tax preparation. An accountant could be a dedicated employee of a company or work for a third party hired by businesses to manage their books and prepare their taxes.
What Does an Auditor Do?
Put simply, Auditors come in behind accountants and verify the work they do.
An auditor is a member of a professional accountancy body who holds a specific licence to conduct statutory audit work. Auditors examine the financial statements prepared by accountants and ensure they represent the company's financial position accurately. Auditors verify that these financial statements, particularly the ones of public companies that are required to be released annually, are assembled in accordance with generally accepted accounting principles (GAAP).
"Two-thirds of the Earth's surface is covered with water. The other third is covered with auditors from headquarters."
- Norman Ralph Augustine
An audit is an independent examination of the financial statements and underlying books and records of a company. The auditor will report back to the shareholders of the company.
In many cases, it is a legal requirement for a company to have an annual audit. In cases where it is not a legal requirement directors may opt to have an audit. The auditor must reach an opinion on a number of factors whether or not the accounts show a true and fair view and whether the company has kept proper books and records.
Where the auditor reaches the option that the accounts do not show a true and fair view the audit report will clearly state this. If this situation arises, the audit report will contain specific details on the areas where the issue arose.
Accounting vs. Auditing Key Differences
Accounting and auditing draw from the same educational pool and, for the most part, require similar skill sets. However, differences exist. Put another way: all auditors are accountants, but not all accountants are auditors.
If you want to become an auditor you will have to be a graduate, post-graduate, Accounting Technician, or member of another accountancy body, you can start the Chartered Accountants programme. As well as your practical work experience, you’ll be studying to achieve your CAP 1, CAP 2 and FAE exams.
Because of the parallels between the two professions, comparing the auditor vs. accountant roles can help those pursuing an accounting career pick the occupation that best aligns with their interests and goals.
The Nitty Gritty Differences
- Accountants possess in-depth knowledge of the day-to-day details of a company’s finances. They try to identify and correct errors before they become larger problems.
- An auditor focuses instead on the big picture, drilling down into individual records only when needed to verify accuracy.
- Whether an accountant works inside a company or consults from outside, they’re intimately involved with the company’s finances and often work closely with other employees.
- By contrast, an auditor requires independence to work effectively and to avoid conflicts of interest. Auditors tend to work on their own, asking questions of other workers only as needed.
- The average accountant salary in Ireland is € 55 000 per year or € 28.21 per hour. Entry-level positions start at € 45 743 per year, while most experienced workers make up to € 67 500 per year.
- The average auditor salary in Ireland is € 57 500 per year or € 29.49 per hour. Entry-level positions start at € 49 845 per year, while most experienced workers make up to € 70 000 per year.
When it comes down to it, it's about which career appeals to you more.
Enjoyed this article? Leave a rating!
Loading...
