Accounts refer to the systematic recording, classification, and summarization of financial transactions. They provide a snapshot of an organization’s financial position. Such as:   

Income Statement Shows revenue, expenses, and net income over a specific period. Balance Sheet Presents assets, liabilities, and equity at a given point in time. Cash Flow Statement Tracks cash inflows and outflows.

Proper accounting is very necessary because it ensures accurate financial reporting, aids decision-making, and helps maintain financial stability.

Furthermore, An audit refers to the review or inspection of a company’s financial records by an independent body. The purpose is to ensure accuracy, transparency, and compliance with reporting standards. External Audits: These are commonly performed by Certified Public Accounting (CPA) firms. The external auditor evaluates financial statements and internal controls. An unqualified audit opinion indicates that no material misstatements were identified. Internal Audits: These serve as a managerial tool to improve processes and internal controls within the organization. They are conducted by internal employees or external third-party firms. IRS Audits: The Internal Revenue Service (IRS) conducts audits to verify tax compliance.

Audits validate financial information, while accounts provide a structured view of an organization’s financial activities. Both are crucial for maintaining transparency and trust in the financial world.