How is accounting different from audit?

Question

Accepted Answer

Quick answer. Accounting is creating your financial records — recording transactions and preparing your financial statements. Audit is checking them — an independent examination that verifies those statements are true and fair. One builds the numbers; the other verifies them. The difference in plain terms. Accounting is ongoing and internal: recording every transaction, reconciling accounts, and producing your profit & loss, balance sheet and cash statements. It's done by you, your finance team, or your accountant. Audit is periodic and independent: a separate, qualified auditor examines those finished statements and gives an opinion on whether they fairly reflect reality. Accounting is the story you tell; audit is the independent fact-check. Why both exist. Accounting gives you (and everyone) the numbers to run and understand the business. Audit gives outsiders — investors, lenders, regulators — confidence that those numbers can be trusted, because someone independent checked them. Our honest take. Don't confuse “our books are done” with “our books are verified.” Accounting keeps you informed; audit makes you credible. You need both, and — importantly — they should be done by different people (see the next-but-one question).