Accountants can be independent but some are employed by the business they do accounting for
#1. Auditors are normally independent. Accountants can be independent but some are employed by the business they do accounting for. Auditors are independent so that they aren’t associated with the business, so they won’t be bias. External users don’t trust employed auditors because they can be bias and falsify statements. Auditors examine the financial statements after the fact. Accountants prepare the financial statements. Both accountants and auditors have to have about the same amount of education. Auditors are responsible to make sure not only financial statements are correct, but they also do auditing in operations and compliance. In the financial statements, the auditors makes sure all entries are correct. In operations, they make sure computer systems are performing correctly in preparing payroll, bookkeeping, accounting, etc. Compliance auditors are to make sure requirements are made for bank loans. Certified public accounts perform audits and other services like tax preparations, consulting services, and bookkeeping and accounting. When auditors and CPA audit a company, they file reports on the finding. These reports are normally given to internal users, normally upper management. The purpose of audits is
#2. Accounting involves the recording, classifying, and a recap of economic events and issues for a firm. They provide this information for the purpose of decision making. Auditing involves gathering this information and other evidence to determine similarities between the information provided and the established guidelines accountants follow. Skills overlap for auditors, but not necessarily for accountants. The way I understood it from the book, an auditor needs to pass the CPA exam which verifies they have a deeper understanding of the accounting system. These requirements they continue to achieve gives them an “expertise” status to conduct audits. An auditor could be an accountant but an accountant cannot be an auditor. The responsibilities are similar as being an accountant, doing the daily tasks of an accountant. When a CPA conducts an audit they must gather the information that has been provided by the accountant and gather other evidence for the auditing period. The auditor then compares the information to establish if the proper guidelines have been followed and if the information that has been provided to the users is in fact accurate and truthful.
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