Similarities & Differences Between / Among Bookkeeping, Accounting And Auditing With Relationship

Bookkeeping VS Accounting VS Auditing

Here we will study the comparison between Bookkeeping, Accounting and Auditing.

1. Bookkeeping is concerned with recording of Business Transactions in the Book or Journal of Business. Accounting is the art of recording, classifying, summarizing and interpretation of the results while Auditing helps us to verify and check Books of Accounts and in order to ensue reliability and accuracy of Accounting Information.

2. Bookkeeping is the first and basic step which is related to recording phase of Business Transactions while accounting starts after Bookkeeping ends i.e., transferring accounting Data to Financial Statements to summarize this data and finally interprets these results to Users of Financial Statements. Auditing starts where Accounting ends. At the end of Accounting Period, The Qualified Auditor examines all the Accounting Data whether it is in Journal, Ledger or Financial Statements of the Business in order to find out Errors And Frauds and provide true, reliable and accurate Accounting information.

3. The man working on Bookkeeping for the company is called Bookkeepers and his qualification may be Graduation, but he must have knowledge of maintaining of Books of Accounts. If Computerized Accounting System is operating in the company then, he must have the knowledge of using the relevant Accounting Software like Quickbooks. Accountant is the person who does the Accounting job selected for Accounting Department. His Qualification can be Graduation, but he must have professional knowledge of Bookkeeping and how to prepare and analyze Financial Statements. The person doing Auditing work for a company is called Auditor. He must be Qualified Chartered Accountant. Only that person conduct the work of Auditing for the Firms. Auditor has knowledge of both Accounting And Auditing.

4. The bookkeeper ranks lower in Internal Management as compare to Accountant as his task is restricted to maintain books of accounts while Accountant can prepare financial statements and perform various tasks on the behalf of Internal Management. Auditor or Audit firm is the external and independent party so its work is to conduct its work honestly during the examination of Accounting Information.

Relationship Between / Among Bookkeeping, Accounting And Auditing

There is a strong relationship exists between or among bookkeeping, accounting and auditing because if your business does not have proper records of books of accounts, then you can not classify, summarize, analyze and interpret the results and without proper checking and verification of books of accounts and financial statements from a Qualified Chartered Accountant Audit Firm, your Financial Statements can not provide true, accurate and reliable information to the Users of Financial Statements / Information. So, all of these branches interact with each other for the effective performance of the business.

Similarities Between / Among Bookkeeping, Accounting And Auditing

All of these branches are the essential parts for the proper maintaining and checking of accounting records.

All of these are used advanced accounting software to maintain, checking and verification of accounting information accurately and reliably.

So, we can say that Bookkeeping is the recording aspects of Accounting Data. Accounting not only records Bookkeeping but also summarize, analyzed and interprets the accounting data. Auditing is the checking and verification of Books of Accounts and Financial Statements in order to find out reliable and accurate accounting information so that errors, mistakes and fraud can be prevented, detected, and corrected.