We as a nation have come a long way on the path of progress while the current situation is pretty grave due to the menace that is Covid-19 that has taken the entire world under its grasp where the death toll has risen to an alarming rate with no signs of slowing down anytime too soon.
While the doctors are working day and night to work out a cure or vaccine to the deadly virus, people are struggling to come to terms to living with it, the nationwide lockdown has taught many things to the citizens on how to care for their health.
However, when it comes to financial matters, mankind, despite taking all the necessary precautions, becomes careless when it comes to following the rules and regulations given by the federal government of his country and indulges in crimes like tax fraud and evasion, which ultimately leads to his downfall.
It isn’t surprising that certain people are into shady dealings despite owning million dollar business organizations or maybe perhaps because of it as no matter how much you have, it isn’t enough and the heart always yearns for more.
Well, this is the reason why we have income tax offices and auditors tailing them at every end as these are the people because of whom economy is in shambles and nearly 10 million people are below poverty line.
This brings us to the subject of accounting and auditing, two very different spectrums but extremely correlated ones that form the core basis of tax related issues that have to be followed by the citizens at large.
Accounting is defined as the process of measuring the financial and non-financial transactions of a business or firm at the end of each financial year which usually begins on 1st April and ends on 31st March.
It is necessary to keep tabs of the economic activities in which businessmen and investors are involved, especially if they have a dubious reputation to their name which can be easily seen through their financial background and credit history with the bank in which they have their account.
Accounting involves investors, creditors and bank regulators while the recording of the transactions involved is called bookkeeping that is a common practice in financial systems.
Accounts are maintained in ledgers that serve as proof of the company’s existence while the auditors have to check their financial statements regarding the company so as to give it the stamp of a legal entity.
An audit service provider is used for maintaining the auditors involved in tailing unscrupulous firms and companies where they allow them to commit mistakes so that they are lured into a false sense of security and put off their guard, which is the opportune moment to catch them red handed.
This isn’t an Accounting Vs Auditing debate but just to show that they are two sides of the same coin that are inconceivable without the other and have equal contribution in keeping an economy corruption free.