Accounting invloves recording summarizing an organization’s transaction or business deals such as purchases and sales and reporting them in the form financial statement in many countries the accounting or accountancy profession has professional organization which operate their own training and examination systems and make technical and ethical rules:these relate to accepted ways of doing thing.
Bookkeeping is the day-today recording of transaction
Financial accounting includes bookkeeping and preparing financial statement for shareholder and creditors
Management accounting involves the use of accounting data by manager for making plans and decision
Auditing means examining a company systems of control and accuracy or exactness of its records looking for error or possible fraud : where the company may have deliberately given false information.
An internal audit is carried out by a company own accountant or internal auditor
An external audit done by independent auditor: auditor who are not employees of the company
The external audit examines the truth and fairness of financial statement. It tries to prevent what is called ‘creative accounting’ , which means recording transaction and values in a way that produces a false result-usually an artificially high profit