1. Involves examination of financial statements to prove the true and fair view of company’s affairs.
  2. It is done mainly at year-end after the directors have prepared the financial statements, although the planning work could be carried out earlier.
  3. An audit is mainly governed by the international standards on auditing (ISA).
  4. The auditor must be independent of all the stakeholders such as management.
  5. It is a statutory requirement that financial statements are audited.


  1. Involves preparation of books of accounts to aid in decision-making.
  2. It is a continuous process carried out through out the financial period.
  3. In preparing financial statements and maintaining books of accounts, the accountant is guided by generally accepted accounting standards.
  4. Accountancy is a management function aimed at assisting management to run the business in an orderly efficient manner.
  5. It is a statutory requirement that all companies must maintain proper accounting records.