Accountancy begins where book-keeping ends and auditing begins where accountancy ends. Comment.

Book keeping is concerned with the systematic recording of transactions in the books of original entry and their posting into ledger. In involves:

  1. Journalising,
  2. Posting Ledger,
  3. Totaling of different accounts in the ledger,
  4. Balancing.

Book keeping is generally performed by junior clerks in the books and are mechanical in nature. The book keeper has only the primary knowledge of accounts and to principles.

Accountancy:

Accountancy begins where book-keeping ends. It means, accountant comes with the picture where book-keeper has done his job. The accountant performs the following functions:

  1. Checking the work of the book-keeper,
  2. Preparation of trial balance,
  3. Preparation of financial statements e.g. Profit & Loss account and Balance Sheet,
  4. Passing ratification entries and making necessary adjustments.

Thus, accountancy is .concerned with classification and summarization of financial records and it is semi-analytical in nature. Its main object is to compile and analyse the business records. The accountant may or may not be an employee of the business. He has knowledge of book-keeping and accounting principal and practices.

Auditing:

Auditing is a critical and detailed examination of the accounts prepared by others. Auditing begins where accounting ends”. Auditing is a fact-finding technique. The auditor checks the truthfulness of accounts by verifying and vouching the entries passed by the accountant and final accounts prepared by him Auditing is therefore, the securiting of accounts of a business, with. the help of vouchers, documents, and the information given and explanation submitted to Kim. Unlike an accountant.

An auditor has to satisfy himself about the bonafide of accounts and vouchers. After that the auditor is required to submit his report to the effect whether or not the Balance Sheet show a true and fair view of the existing state of affairs of the business.

Unlike an accountant the statutory auditor must be a qualified chartered accountant and must be capable of taking independent judgement at the time of examination of books. Account is generally an employee of the organization whereas, an auditor is an independent person generally appointed by the Board of directors or Shareholders of a company annually in their Annual General Meeting.

Tags: B.Com

Owlgen
Logo
Enable registration in settings - general
Compare items
  • Total (0)
Compare
0