Bookkeeping, Accounting and Audit! What You Did Not Know.

I am sure you have probably heard the terms Bookkeeping, Accounting and Audit a lot of times. The Question is, do you know what the meaning of those words? Yes I guess; or maybe no. Let us go gradually to see some aspects about these fields that you have no clue about.

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Bookkeeping

Bookkeeping is the backbone of every business. It is the daily recording of transactions in a business as they occur. This has to be done in order, and following guidelines that are in line with Accounting, Audit and Tax. Without it, the accounting function can not have data to function. It is true that in many small business, accounting and bookkeeping are the same thing. They are two separate functions normally. Have you ever known that there are professional bookkeepers who are not accountants actually?

Bookkeeping ensures that the assets, liabilities, equity, expenses and income for the business are well recorded according to the period they correspond to. This is where a lot of business owners who do not have professionals in accounting and or bookkeeping face a lot of challenges.

Accounting

In a simple way, we can say that accountants are advanced bookkeepers. Their job mainly with bookkeepers in the same business will be to build on what has been produced by bookkeepers (financial statements) They are there to provide in-depth information relating to financial statements, internal reports and eternal reports.

When it comes to issues about Tax and Payroll, accountants are more involved in the process than bookkeepers are.

Auditors

This is another set of people that business owners often have a lot of misconceptions about. There are two kinds of auditors. We have the internal and external auditors. These two professionals have very different functions in a business. External auditors are primarily concerned with the that fact that financial statements follow GAAP (Generally Accepted Accounting Principle). Internal Auditors on the other hand are primarily concerned with risk management, governance and control. External auditors certify financial statements whereas internal auditors can not do this. The most they can do is to give an opinion.

Auditors rely very much on what accountants produce to continue with their own part of the job. This does not matter whether it is internal or external auditors. While they do not produce any financial statements, their reports matter a lot to the growth of companies.

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Ngong George Fonyuy (Acccountant, Auditor and Entrepreneur)