Accountants and auditors work with financial statements and ensure they are accurate, up-to-date, and in compliance with various regulatory standards. They require similar skill sets but subtle differences exist in their duties. Organizations and businesses often enlist the services of both tax accountants and auditors when preparing and submitting financial statements. What is the difference between a tax accountant and an auditor?
Tax Accountant:
Tax accountants specialize in helping businesses and individuals plan for, minimize and file taxes. Accountants influence business practices, cash flow management and how businesses report their earnings to the government. Accounting requires a person who is detail-oriented and focused. Small mistakes can cost millions, particularly for large companies dealing with massive sums of money. An accountant can be a dedicated employee of a company or work for a third party hired by businesses to manage their books and prepare their taxes. An accountant:
- prepares financial statements (balance sheet, income statement, statement of cash flows, statement of owner equity)
- undertakes bookkeeping
- tracks expenses and revenues
- forecasts future profits and cash flows
- evaluates and addresses tax liability
- answers complex business tax questions
- provides corporate tax advice
- does tax preparation
- assists with change in the structure or nature of your company
Auditor:
Auditors ensure that accountants’ work is correct and follows the law. They work with organizations after they’ve made decisions regarding business practices, cash flow management and how to report their earnings to the government. They examine the financial statements prepared by accountants and ensure they represent the company’s financial position accurately. Auditors search for errors or problems. They require the ability to pay attention to detail, but also need strong investigative skills. While auditors sometimes uncover intentional wrongdoing (subterfuge, fraud, misstatements, tax evasion), they typically find unintentional mistakes. Like accountants, an auditor can work internally for a specific company or for a third party, such as a public accounting firm. Many auditors are employed by government and regulatory bodies. Auditors:
- collate, check and analyze spreadsheet data
- examine company accounts and financial control systems
- gauge levels of financial risk within organizations
- check that financial reports and records are accurate and reliable
- ensure that assets are protected
- identify if and where processes are not working as they should and advise on changes needed
- prepare reports, commentaries and financial statements
- liaise with managerial staff and present findings and recommendations
- ensure procedures, policies, legislation and regulations are correctly followed and complied with
- undertake a review of wages
The key difference between tax accountants and auditors is that tax accountants specialize in helping businesses and individuals plan for, minimize and file taxes while auditors ensure that accountants’ work is correct and following the law. Your business likely needs the services of both a CPA and an auditor.
As one of Calgary’s most respected business tax and accounting professionals, the Cook & Company team is proud to empower the success of businesses both local and abroad. To learn more about our tax planning and audit & assurance services, give us a call at (403) 398-2486 today or fill out the request for meeting form.
