Auditing vs Accounting

Auditing vs Accounting

	Auditing	Accounting
Framework	International Auditing Standards Malaysian Financial Reporting Standards Relevant Acts	Malaysian Financial Reporting Standards
Scope	Provide opinion of financial statement Post-preparation review of the whole financial statement set and underlying systems	Prepare financial statements Day-to-day processing and period-end reporting
Reporting structure	Shareholders of client’s company	Management
Core purpose	Independently examine financial statements to express an opinion on their truth and fairness	Record, classify, and summarize transactions to prepare financial statements
Main focus	Verification of accounting records and evaluation of controls, estimates, and disclosures	Measurement and reporting of financial performance/position
Timing	Periodic (usually annual/interim) after accounts are prepared	Continuous throughout the period; closes at period end
Responsibility	Independent auditor (external or internal for internal audits)	Management/accounting team
Output	Audit report/opinion (unmodified, qualified, adverse, or disclaimer)	Trial balance, financial statements, management reports
Standards/Guidance	Auditing standards (e.g., ISA/Malaysian Approved Standards on Auditing) & ethics codes	Financial reporting frameworks (e.g., MFRS/IFRS)
Independence	Must be independent of management (external audit)	Not independent—part of management function
Evidence base	Audit evidence gathered via tests: inspection, observation, confirmation, re-performance, analytics	Source documents and internal records prepared by the entity
Materiality lens	Opinion based on material misstatement thresholds	Detailed accuracy for recording and reporting
Users	External users relying on assurance: shareholders, lenders, regulators	Internal management, investors, regulators (via published FS)
Legal/Regulatory	Audits legally required for many entities; others voluntary	Preparation may be legally required for companies
Types	External (statutory), internal, compliance, forensic, performance	Financial, management, cost, tax accounting