Difference Between Auditor and Accountant

Accounting is the process of recording the financial transactions of a business in a manner suitable for preparing the financial statements of the business which provide an accurate view of the business activities of the company.

On the other hand, auditing is the reviewing of financial statements or books to ensure they are reliable.

While accountants in UAE deal with recording all the transactions of the business, auditors in UAE deal with reviewing the financial statements of the company to ensure the information provided is genuine and reliable.

In this blog, we’re going to take a look at the differences between auditing and accounting.

Definition of Auditing and Accounting

The first significant difference between auditing and accounting is the definition of the process, as mentioned previously. Auditing, as a process, is more concerned with the evaluation of transactions and financial statements of the business while accounting is concerned with ensuring that the transactions are correctly recorded.

While both of them deal with financial statements, auditors in UAE and other countries are responsible for checking the financial statements while accountants are responsible for creating those statements properly.

Differences in Regulations

Auditors in UAE and accountants in the UAE have to comply with various regulations set by different bodies. While accountants have to comply with the accounting standards set up by international accounting bodies, auditors have to comply with standards of auditing that are set by international auditing boards.

Both of the professions require strict adherence to the standards as they are crucial in creating reliable, unbiased, and standardised financial information.

Differences in Deliverables 

The key deliverables are different when it comes to accountants and auditors in UAE. While the key deliverable for accounting is the financial statements of the company vis-a-vis the statement of profit and loss, the balance sheet, and the cash flow statement.

The key deliverable for auditors is the audit report which is the report produced by the auditors at the end of an audit and contains information about the entire audit. The audit report can have different results. For example, a qualified audit report is produced if the auditor found some discrepancies in the financial statements. An unqualified report is issued when the auditor finds that the financial statements provide an accurate and fair view of the company’s financial situation.

Differences in the Process

While accounting is an on-going activity for businesses, auditing is a periodic activity. Since accounting deals with ensuring the business is recording every transaction correctly, it is a day-to-day process. The financial statements are then created from the accounting books on an annual basis or a quarterly basis.

Auditing is a period activity as it is meant to be a periodic review of how accurate the accounting of the company is. An annual audit of the financial statement is a statutory requirement for most countries and, unsurprisingly, one of the most common forms of an audit conducted around the world.

Conclusion

While both auditing and accounting deal with the financial statements of the company, both are entirely different processes and are considered to be distinctively different. We hope this blog helped clarify some of the differences between auditing and accounting!

Benefits of Quality Audit Services

An audit assists in monitoring the system gathers information regarding the effectiveness of the quality system and ensures that the standards and conformance are being met. In every organization standards and policies are written and documented; audit ensures that these quality standards are being met. It acts as a bridge between the practices of the quality management processes and the documented procedures and policies so that things can be done in the right way and standards can be met as expected.

When there are measurable data to analyze, preventive and corrective actions in place and track of everything right from defects to issues and potential risks ready, an internal Quality Excellence Environment is automatically created within the organization. Audit service in Dubai provided by Standard Auditors enables a company to learn and grow. Mentioned below are some of the benefits of quality audit services- 

Tool for Gap analysis and evaluate internal process- quality audit is a tool that measures gaps in organizational standards and processes. There exist gaps in between expected quality standards and the one being followed. The quality audit evaluates the quality management processes of an organization to highlight the potential improvement areas and offer cost-effective solutions.

Helps in reducing the cost to quality- processes that cannot be measured are not considered effective. The different aspect of a quality management system is measured with the help of quality audits. Those measurements are then tracked; analysis results are thereupon converted to opportunities to obtain optimized quality standards processes and also add value to the core business of an organization.

Leads to high business satisfaction using CAPA- teams usually tend to reject or avoid non-conformances. It is not merely a fault finding mechanism but it makes easy to identify the potential gaps and thereby analyze the corrective and preventive action. Periodic audits also ensure that these corrective and preventive actions are effective and on time or not.

Track serious issues before occurrence- there are different parameters and checkpoints that need to be checked during periodic quality audits. For example, the evidence of reviews/signoffs is checked by the auditor from the reviewer or the client before deploying the system into the client’s production environment. This helps in identifying serious business loss and can even lead to a penalty.

How to Choose the best Auditors for Your Business

Choosing the right auditor is a crucial decision as you will be in a relationship for years to come and will be beneficial for both the parties. An auditor must always deliver way beyond business compliance; add value to the business with the right blend of experience, qualifications, approach, and technologies. A failed auditing relationship causes potential damage to the business, brand, and value. The auditing and assurance services in UAE provide highly professional services to clients in a wide range of industries. 

It is understood that the auditor must complete the task as per the law and custom, but there are certain factors that must be considered before hiring an auditor. 

Industry experience - if the auditor has experience within the industry you operate, it will prove to be an efficient audit and the generic questions being asked will also be avoided. You can expect a relevant value-added service and the analysis can be turned into concrete actions.

Qualifications - in case an audit is conducted to meet an external regulator’s requirements, it is important that the lead audit partner qualifies the conditions expected by the regulator.

Quality assurance processes - a good auditor must be able to demonstrate how they will fulfill their professional service quality in terms of best practices, auditing standards and compliance with relevant legislative requirements. 

Use of technology - a good auditor must use technology and data analytics to perform an audit. Technology aids in digesting large data sets across organizations, finding anomalies quickly and freeing auditors to assess, interpret and focus on its implications.

The reputation of the audit firm - you can check for references, testimonials, and awards, which indicates an audit firm’s reputation in the industry. 

Reasonable fees- the fee is often a key decision factor. It is, however, important to ensure that the audit fees are adequate so that the quality of the audit does not get affected adversely.