The Key Differences Between A Tax Consultant And An Auditor

To ensure that they adhere to legislation, responsible firms make a significant investment. When compiling and filing financial accounts, they frequently need the services of both auditors and tax accountants.

The fields of tax accounting or auditing may be worth looking into if you're interested in a profession that combines financial analysis with compliance.

The differences between tax accountants and auditors are discussed in this article along with a comparison of their basic job descriptions and educational backgrounds. We also offer advice to help you determine which career path is most suited to you.

Before we begin the comparison, let us first define who tax accountants and auditors are.

Who is a tax accountant?

A tax accountant is a specialist who manages taxes for people, corporations, businesses, or governments. In contrast to an accountant who manages all financial concerns, a tax consultant will just focus on taxes in this position and adhere to all local, state, and federal tax regulations.

Who is an auditor?

An auditor is a specialist who finds fraud and corrects accounting mistakes. Furthermore, comprehensive auditing deters fraud from ever happening in the first place. Auditors compile evidence to support their findings. They can be internal, external, government or private, forensic or technological, depending upon the requirement.

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The difference between a tax accountant and an auditor

Tax accountants specialise in assisting firms and individuals prepare for, minimise, and submit taxes, while auditors make sure that accountants' work is accurate and compliant with the law. This is the main distinction between tax accountants and auditors.

Tax accountants have an impact on how companies do business, manage their cash flow, and submit their tax returns. After these choices have been made, auditors work with the company to look for mistakes or issues.

While auditors occasionally unearth deliberate misconduct or tax fraud, they frequently discover inadvertent errors.

Academic qualifications and skills of an auditor

Education for auditors

Following the same academic route as students interested in accounting benefits those interested in auditing. The best preparation for a job in this sector comes from business-related studies combined with internships at large organisations or public accounting firms. Master's degree programs in auditing are an alternative for people who want to strengthen their academic background for the position; however, they are not compulsory.

Credentials for auditors

Candidates for auditor positions must obtain their CPA certifications to work for many public accounting firms and corporations. Some professionals in the industry decide to pursue certification from The Institute of Internal Auditors and get the designation of Certified Internal Auditor. You need to have appropriate academic and professional experience, provide a letter of recommendation, and present government-issued photo identification to be qualified to take the institute's test.

Skills for auditors

Although auditors have overlapping expertise with tax accountants, they often use distinct skill sets. They often rely on skills such as

• Analytical skills

• Interpersonal skills

• Attention to detail

• Critical thinking

• Tactful

• Reliability

• Confidentiality

• Independent

• Integrity

The academic qualifications and skills of a tax accountant.

Education for tax accountants

Most accountants seek a bachelor's degree in finance. They could choose to major in business administration, finance, or economics. Most companies simply demand a bachelor's degree, while some professionals may decide to pursue a higher degree, such as a Master of Business Administration. In addition to helping students prepare academically, institutions assist students in locating summer internships where they build professional contacts and gain leads for their first full-time jobs.

Tax accountants' credentials

Candidates must pass the Qualified Public Accountant, or CPA, exam provided by the American Institute of Certified Public Accountants to become certified accountants. They must finish 150 credit hours of undergraduate education, including 24 hours of business administration courses and 30 hours of accounting, before they may take the test. Candidates have 18 months to complete all four test components with a minimum score of 75. There are four sections:

• Auditing and attestation

• The business environment and concepts

• Financial accounting and reporting

• Regulation

Skills for tax accountants

• Strong numeracy skills

• Computer skills

• Organizational skills

• Communication skills

• Keen attention to detail

• Knowledge of accounting and bookkeeping procedures

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Tips for choosing between being a tax accountant and an auditor

Here are some tips to help you choose a career path in either accounting or auditing:

Think about your work routines.

Tax accountants spend most of their time in their offices, working with individuals or families. They must swiftly establish close working ties with the representatives of the firms they audit. Auditors may frequently work outside of their firm's office, spending more time visiting clients' workplaces. If you're extroverted and energetic, auditing may be a better fit for you.

Decide which client connection type you prefer.

You could succeed as an auditor if you're at ease having difficult conversations with customers and forcefully giving your professional view to them. Tax accountants strive to reduce tax responsibilities for both businesses and individuals so that the clients may keep more of their revenues. Internal auditors help firms function ethically in the long run, but they occasionally have to spot errors that cost the business money in the short run.

Evaluate your attitudes toward travelling.

Tax accountants travel a lot, visiting clients and working at their offices during a project. You may anticipate exposure to a range of locales and situations unless you serve as one company's internal auditor. Auditing could be a better fit for you if you want to switch things up frequently.

Conclusion

We hope it is clear enough to you what these jobs offer and whether you should go for them or not. We advise before deciding to try it out. You may try both if you have the basic credentials that match both jobs.