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    Difference Between Accounting and Audit

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    srpvicky
    The key differences between accounting and audit are: - Accounting involves maintaining books of accounts, performed by an accountant appointed by management. Audit involves examining books of accounts and reporting on accuracy, performed by an auditor appointed by shareholders. - Accounting work is more mechanical in nature, while auditing requires specific qualifications and is less mechanical. - No specific qualifications are required for accounting, but auditing requires specific qualifications.

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    Difference Between Accounting and Audit

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    srpvicky
    76 views5 pages
    The key differences between accounting and audit are: - Accounting involves maintaining books of accounts, performed by an accountant appointed by management. Audit involves examining books of accounts and reporting on accuracy, performed by an auditor appointed by shareholders. - Accounting work is more mechanical in nature, while auditing requires specific qualifications and is less mechanical. - No specific qualifications are required for accounting, but auditing requires specific qualifications.

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    Gulu Accounts

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    The key differences between accounting and audit are: - Accounting involves maintaining books of accounts, performed by an accountant appointed by management. Audit involves examining books of accounts and reporting on accuracy, performed by an auditor appointed by shareholders. - Accounting work is more mechanical in nature, while auditing requires specific qualifications and is less mechanical. - No specific qualifications are required for accounting, but auditing requires specific qualifications.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    76 views5 pages

    Difference Between Accounting and Audit

    Uploaded by

    srpvicky
    The key differences between accounting and audit are: - Accounting involves maintaining books of accounts, performed by an accountant appointed by management. Audit involves examining books of accounts and reporting on accuracy, performed by an auditor appointed by shareholders. - Accounting work is more mechanical in nature, while auditing requires specific qualifications and is less mechanical. - No specific qualifications are required for accounting, but auditing requires specific qualifications.

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    1. Difference between Accounting and Audit 1. Meaning :Accounts : Accounting means the maintaining of the books of accounts.

    Audit : Auditing means examining the books of accounts and reporting means to report about their accuracy. 2. Performance Of Work :Accounts : Accountant job is performed by the accountant. Audit : Auditing job is performed by the auditor. 3. Appointment :Accounts : Accountant is appointed by the management. Audit : Auditor is appointed by the share holders. 4. Nature Of Job :Accounts : Accountant job is a mechanical nature. Audit : Auditor job is is not so mechanical in that sense. 5. Qualification :Accounts : For the accountant no specific qualification is required. Audit : For the auditor specific qualification is required. 2. Govt Accounting System

    Governmental accounting is an umbrella term which refers to the various accounting systems used by various public sector entities and Government offices. The Government Accounting System is governed by Government Accounting Rules.1990. The accounts of

    Government are kept in three parts: 1. Consolidated Funds of India 2. Contingency Funds of India 3. Public Account

    3. Difference between Accrual and Cash


    Under the cash basis of accounting 1. Revenues are reported on the income statement in the period in which the cash is received from customers.

    2. Expenses are reported on the income statement when the cash is paid out. Under the accrual basis of accounting 1. Revenues are reported on the income statement when they are earnedwhich often occurs before the cash is received from the customers. 2. Expenses are reported on the income statement in the period when they occur or when they expirewhich is often in a period different from when the payment is made.

    4. Capital Expenditure Vs. Revenue Expenditure

    Capital Expenditures 1 Its effect is long term i.e., it is not exhausted within the current account year. Its benefit is enjoyed in future year or years also. In a word, its effect is reduces gradually. An asset is acquired or the value of an asset is increased as a result result of this expenditure. It does not occur again and again - it is non-recurring and irregular. Generally, it has physical existence i.e., it can be seen with eyes. 1

    Revenue Expenditures Its effect is temporary, i.e., it is exhausted within the currentaccounting year.

    Neither an asset is acquired nor the value of an asset is increased. It occurs repeatedly - It is recurring and regular. It has no physical existence, i.e., it cannot be seen with eyes.

    3 4

    3 4

    5. Major Head Vs Minor Head

    6. Trial Balance
    A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit columns. A company prepares a trial balance periodically, usually at the end of every reporting period. The general purpose of producing a trial balance is to ensure the entries in a company's bookkeeping system are mathematically correct.

    7. Cash Flow Statement


    In financial accounting, a cash flow statement, also known as statement of cash flows, is a financial statement that shows how changes in balance sheetaccounts and income affect cash and cash equivalents, and breaks the analysis down to operating, investing, and financing activities. Essentially, the cash flow statement is concerned with the flow of cash in and out of the business. The statement captures both the current

    operating results and the accompanying changes in the balance sheet. As an analytical tool, the statement of cash flows is useful in determining the short-term viability of a company, particularly its ability to pay bills.

    8. Balance Sheet
    A financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. These three balance sheet segments give investors an idea as to what the company owns and owes, as well as the amount invested by the shareholders. The balance sheet must follow the following formula: Assets = Liabilities + Shareholders' Equity

    9. Accounting Standard
    Indian Accounting Standards, (abbreviated as india AS) are a set of accounting standards notified by the Ministry of Corporate Affairs which are converged with International Financial Reporting Standards (IFRS). These accounting standards are formulated by Accounting Standards Board of Institute of Chartered Accountants of India. Now India will have two sets of accounting standards viz. existing accounting standards under Companies (Accounting Standard) Rules, 2006 and IFRS converged Indian Accounting Standards(Ind AS).

    10. Sources and Application of Fund


    The Source and Application of Funds Statement shows the total sources of new funds raised between Balance Sheet dates and the total uses of those funds in the same period. The Source and Application of Funds Statement tells exactly where the company got their money from and how it was spent. It tells whether management has made sound investment decisions. This statement is made up by listing the changes that have occurred in all of the Balance Sheet Items between any two Balance Sheet dates.

    11. Window Dressing


    A strategy used by mutual fund and portfolio managers near the year or quarter end to improve the appearance of the portfolio/fund performance before presenting it to clients or shareholders. To window dress, the fund manager will sell stocks with large losses and purchase high flying stocks near the end of the quarter. These securities are then reported as part of the fund's holdings.

    12. TDS in case of contractor


    Under the Indian Income Tax Act, the following provisions relate to the Tax Deduction at Source from payments to Contractors and Subcontractors under section 194C.

    Person responsible for paying any sum for carrying any work to any resident contractor should deduct tax at source.

    Tax should be deducted at source only if the contract is between the contractor and the following specified persons: 1. The Central Government or any State Government. 2. Any local authority. 3. Any corporation established by or under a Central, State or Provincial Act 4. A company 5. Any Co-operative Society. 6. Any authority, constituted in India by or under any law, engaged either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both. 7. Any Society registered under the Societies Registration Act, 1960 or any law corresponding to that Act in any part of India. 8. Any Trust. 9. Any University established by or under any Central, State or Provincial Act or any institution declared to be a University under the University Grants Commission Act. 10. Any firm. 11. Any individual or Hindu Undivided Family whose books are required to be audited under section 44AB during the immediately preceding financial year. [The turnover from business/profession exceeds the limits specified u/s 44AB during the immediately preceding financial year]. 12. Association of persons or Body of Individuals, whether incorporated or not, whose books are required to be audited under section 44AB during the immediately preceding financial year.

    13. Difference between Deduction and Exemption


    There are certain incomes on which TAX is not charged (fully or to som extent) they are called tax exempted incomes. For example the income from PPF investment is TAX exempted. Your 2nd phrase should have been "deduction from income" or "tax deduction". There are some incomes, where employer or payer is expected to deduct the TAX (at a standard rate) in advance, before maing the payment to you. That is called Tax Deducted at source. Example, bank deducts 10% TDS, before the final payment of interest on FD. A corporate tenant will deduct 15% TDS before making the rental payments. Read more at: http://www.caclubindia.com/forum/difference-between-exemptionfromtax-and-deduction-from-tax-19244.asp#.UjEs9dJQFA0

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