Auditing and accounting are two branches of commerce that have vital roles to play in an accounting system. Accounting procedure of a company begins from an Accounts hand and ends at the hand of the Auditor for verification. So we can say they belong to both the ends of an accounting system.
Accounting begins from the documents that an Accountant makes. Their role pertains till they prepare the accounting statements like a balance sheet that can be produced before the management stating the performance of the business for a financial year. Auditing begins from the point where the job of an accountant ends.
An Auditor verifies the reliability of the financial statements and makes it legally valid. So we can summarise the responsibility of an Accountant as the creator of accounting statements and the responsibility of the Auditor as the examiner of the statements’ reliability.
Table of Content
- Qualifications for Auditor Vs Accountant
- Skills Required for Auditor Vs Accountant
- Auditor Vs Accountant Top Job Profiles
- Auditor Vs Accountant Job Scope
5.1 Job status
5.3 Future growth
Auditor Vs Accountant: An Overview
An Accountant has to prepare the accounting statements of the firm, right from the beginning of recording all kinds of financial transactions happening a firm and find the financial position and profitability of a firm. But the Auditor's job is to evaluate the financial statements of a firm and declare that the Accountant had prepared everything correctly.
- An Accountant thus has a clerical nature of work that moves like an automated work. But an Auditor’s job is of professional nature. His decision making power and intelligence decides his success in his career.
- Usually, an Auditor receives fees as his remuneration. This is because he doesn’t work as a part of a firm, but as a professional consultant of the firm. This denotes his freedom to work in more than a firm at a time. An Accountant , being a normal employee, receives a salary.
- According to statistics, an Accountant would earn about INR 1,50,000 annually where an jobAuditor would earn about INR 3,60,000, both as a beginner.
Now, let’s have a quick look on the above discussed facts:
| Parameters | Auditor | Accountant |
|---|---|---|
| Key Responsibilities | Examination of books of accounts and accounting statements. | Preparation of books of accounts and accounting statements. |
| Average Salary | INR 4,87,000 | INR 1,98,009 |
| Job Status | Profesional | Clerk |
| Top Recruiters | Deloitte, PWC, KPMGC, Ernst and Young, etc. | Areite ventures, Infinigent consulting ltd., Panaesha capital, Shreshta Business solutions. |
Check: Auditor Qualifications
Experience Wise Salary
Even though we represent salary of an Auditor and Accountant on an average, the variations at different level of experience would be as follows:
| Experience Level | Auditor | Accountant |
|---|---|---|
| Entry level | INR 3,60,000 | INR 1,98,000 |
| Associate level | INR 6,18,000 | INR 2,91,000 |
| Senior level | INR 9,89,000 | INR 3,95,000 |
Check: Auditor Jobs
Qualifications for Auditor Vs Accountant
Accounting, being a clerical job, can be done by a person completing his higher secondary education, preferably in commerce stream. But a renowned company will never entertain a person as an accountant without a degree in commerce.
- But to be an Auditor, one should be a certified Chartered Accountant, as per the companies act, 2013.
- So, it is clear that one should be highly qualified to become an Auditor.
- This shows the volume of responsibilities that an Auditor has.
Let us see in detail the qualifications required for an Accountant and an Auditor:
| Qualifications Required | Auditor | Accountant |
|---|---|---|
| 10+2 | Mandatory | Mandatory |
| Undergraduate Degree | Not Mandatory | Preferred |
| Postgraduate Degree | Not Mandatory | Not Mandatory |
| Higher Qualifications | Pass CA exams | - |
Skills Required for Auditor Vs Accountant
- An Auditor’s job is required for the verification of documents like balance sheets, profit and loss accounts and books of accounts. Thus, he/she should be a person with a keen eye. His words are final before the law.
- An accountant may perform any kind of illegal activities to increase their profit or show it reduced before the shareholders.
- The Accountant may manipulate the accounts and pocket the money. Let anything happen, such manipulations should not miss from the keen eyes of an auditor.
- But an Accountant would have to be diligent and careful about making his entries. His intelligence has to be overwhelmed by his accuracy.
- He should be confident enough to produce his statements before an Auditor for a secondary check after his primary check. Thus he becomes accountable before an Auditor auditing.
Keeping these natures of the jobs of both Accountant and Auditor, we can check how different skills benefit them.
| Skills Required | Auditor | Accountant |
|---|---|---|
| Analytical Thinking | Auditor ought to think analytically for verification. | Accountants need to analyse while cross checking financial statements. |
| Intelligence | The intelligence of the auditor helps him to find loopholes in the books of accounts | Obviously, the intelligence of an accountant is limited to the preparation of the accounts. |
| Accuracy | Auditors should ensure the final accuracy of financial statements. | Accountant's accuracy in preparing statements becomes accountable before the auditor. |
| Communication Skills | An Auditor should be able to report in a precise and clear way. | An Accountant’s communication is limited to the preparation of statements as per standards. |
| Business Awareness | An Auditor should have awareness about the firm's objectives and should be loyal to their needs. | An Accountant should make sure the statement he prepares follows the business norms. |
Auditor Vs Accountant Top Job Profiles
Below we have provided a tabular representation of the top job profiles which Auditors and Accountants can get employed in.
| Auditor | Accountant |
|---|---|
| Internal Auditor: They are the part of the firm, who verify the books of accounts before an external auditor. Their average annual salary is INR 6,15,000. | Financial Accountant: They prepare and maintain the books of accounts. Their average annual salary is INR 1,50,000. |
| External Auditor: The professional who acts as an agent of the management for verifying its accounts. Their average annual salary is INR 4,87,000. | Cost Accountant: They prepare and maintain the cost book of a firm. Have an inevitable role in factories and production centres. Their average annual salary is INR 5,88,000. |
| Management Accountant: They analyse and interpret the financial statements for management decision making. Their average annual salary is INR 4,34,000. |
Auditor Vs Accountant Job Scope
The above discussion would have brought a clear image to your mind that Auditing is a high
profile job as compared to that of an Accountant. But the responsibility and legal accountability of an auditor makes the job more demanding. Let us have a comparison of the scope of both these jobs.
Job Status
- An Auditor is a professional who works as an agent to the management. He thus enjoys the freedom that his job entails.
- An Auditor is legally bound to bring out all the material facts related to the statement provided by a firm, verifying it with the supporting documents.
- But an Auditor would have nothing to do with the preparation of books of accounts.
- An Accountant in turn is a part of the firm and would have to work abiding to the needs of the firm.
- This doesn’t mean that he could violate the accounting principles and ethics.
- He becomes accountable if some errors or omissions are noticed on auditing.
- Thus, the true financial position of a firm rests in the hands of an accurate Accountant.
Diversity in Work
- Auditing is one of the highly paid jobs in the world that lacks dynamicity. For years, the Auditor would have nothing to do in a firm or institution rather than checking the accuracy and correctness of books of accounts.
- But when we take the responsibility of the job into consideration, we would often neglect that.
- Accounting field is dynamic with its branches, namely, Management Accounting, Cost Accounting and Financial accounting.
- Financial accounting is the most common branch, where the other two branches give professional standards to accounting jobs.
Check: Management Accounting Courses
Future Growth
- It's beyond doubts that both Auditors and Accountants would have enough demand in the future.
- With the increase in the number of MNCs and other huge institutions, there would always be government and non- government jobs available for Auditors and Accountants.
- Moreover, we should remember that both these jobs exist till management is required.
Auditor Vs Accountant: FAQs
Ques. Who is better, Auditor or Accountant?
Ans. Auditor does a highly paid job than that of an Accountant. He does enjoy a good job status. But at the same time, he bears a lot of responsibility. But for any kind of business, an Accountant is an inevitable part, irrespective of its scale. So both Auditors and Accountants have their own non-replaceable roles.
Ques. Is the Auditor or Accountant paid more?
Ans. An auditor is paid more than an Accountant. When the minimum annual salary of an accountant is around INR 1,50,000 , an Auditor is paid at least INR 3,60,000 per year.
Ques. What is the difference between Accountant and Auditor?
Ans. Basically, an Accountant prepares and maintains the financial records of a firm and the Auditor examines its reliability.
Ques. Can an Accountant work as an Auditor?
Ans. Legally, an Accountant can’t work as an Auditor until he becomes a qualified chartered accountant. But an Accountant would be familiar with the work that an Auditor does.
Ques. Are there any similarities between Auditor and Accountant?
Ans. Accountant and Auditor belong to the beginning and end of the accounting system. Accountant prepares books of accounts and the Auditor verifies its accuracy.
Ques. How can one become an Auditor?
Ans. To become an Auditor, one should be a qualified chartered accountant.
Ques. What should one accountant have in addition to becoming an Auditor?
Ans. As per the companies act 2013, an Accountant or any other person should be a qualified chartered accountant to act as an Auditor.
Ques. Does an auditor have more freedom than an Accountant?
Ans. Auditor enjoys much more freedom than an Accountant because he has an agent-principal relationship with the management where an Accountant has employee-employer relations with management.
Ques. Can an Auditor work as an Accountant?
Ans. Yes, the law doesn’t forbid an Auditor from working as an Accountant.
Ques. Does an Auditor do a riskier job than that of an Accountant?
Ans. Comparatively, an Auditor has more responsibility than an Accountant. As per law, his word is valued as a final report for accuracy of books of accounts which makes his job profile appear more risky.
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