For UK business owners, knowing the difference between an accountant and an auditor is essential for keeping your financial affairs in order. While both deal with your company’s finances, their roles, responsibilities, and purposes are quite distinct.
This guide explains what each professional does, how they differ, and when your business might need one—or both.
What Does an Accountant Do?
An accountant manages and maintains your business’s financial records, ensuring they are accurate, up to date, and compliant with relevant laws. They play a vital role in financial planning, operational efficiency, and business growth.
Key Responsibilities:
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Bookkeeping: Recording daily transactions such as sales, expenses, and income.
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Financial Statements: Preparing balance sheets, profit and loss statements, and cash flow reports.
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Tax Compliance: Filing tax returns and advising on deductions.
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Payroll: Managing salaries, tax deductions, and pension contributions.
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Budgeting & Forecasting: Offering guidance on financial planning and cash flow management.
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Business Strategy: Identifying cost-saving opportunities and improving profitability.
💡 Think of your accountant as your ongoing financial partner, providing day-to-day support and long-term strategy.
What Does an Auditor Do?
An auditor provides an independent examination of your financial records and statements to confirm accuracy and compliance with accounting standards. The purpose is to assure investors, lenders, and regulators that your business is financially sound and transparent.
Key Responsibilities:
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Verification: Checking that financial statements present a true and fair view of your business.
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Independent Assessment: Ensuring records comply with laws and standards.
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Risk Review: Identifying weaknesses in internal controls.
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Compliance Checks: Confirming alignment with HMRC rules and accounting regulations.
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Reporting: Delivering an objective audit report highlighting findings or concerns.
💡 Auditors are external professionals whose independence ensures objectivity in their assessments.
Key Differences Between Accountants and Auditors
| Aspect | Accountant | Auditor |
|---|---|---|
| Role | Prepares and manages financial records | Reviews and verifies financial records |
| Responsibility | Daily financial operations, tax, and strategy | Independent review of statements |
| Work Frequency | Continuous | Periodic (often annual) |
| Relationship | Works closely with the business | Works independently |
| Focus | Operational efficiency and growth | Accuracy, compliance, and risk |
| Legal Requirement | Optional for most businesses | Required for certain businesses |
When Do You Need an Auditor?
An audit is mandatory for:
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Public companies (listed on the stock exchange).
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Large private companies meeting two of the following:
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Turnover above £10.2m
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Balance sheet total above £5.1m
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Over 50 employees
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Charities with income over £1m.
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Financial institutions such as banks and insurers.
You may also choose a voluntary audit to enhance transparency or investor confidence.
When Do You Need an Accountant?
Every business can benefit from an accountant—especially when:
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Finances are complex or multi-streamed.
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You need tax filing support (VAT, corporation tax, self-assessment).
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Strategic planning is required for growth.
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Payroll management is necessary.
If you’re unsure, consulting an accountant early can prevent costly mistakes and ensure compliance.
Can One Person Be Both?
Some accountants are qualified to audit, but independence rules in the UK mean the person who manages your accounts should not also audit them. For impartiality, audits are best handled by a separate professional or firm.
Choosing the Right Professional
Hire an Accountant if:
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You need daily financial management, tax services, or growth planning.
Hire an Auditor if:
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You’re legally required to have an audit or want an independent review to build trust.
Final Takeaway
Accountants keep your finances running smoothly day to day. Auditors provide an impartial check on your financial truthfulness and compliance. Both are vital in different ways—and together, they can help your business stay compliant, efficient, and ready for growth.