Accountant vs Actuary

Difference Between Accountant and Actuary

The key difference between accountant and actuary is that accountants are responsible for the accounting of the financial transactions that have occurred in the past by the company, whereas, the actuaries are responsible for predicting the financial impact of the different events which may occur or may not occur by the company in the future.

The accountant exists to simplify the whole process of accounting while the actuary is to determine the risks of the insurance company and work with underwriters to derive the rates. Both works with the same set of information, generate statistics and handle financial data, but each has a different purpose and performs different business functions.

Let us now look at each one of them in detail –

Who is an Accountant?

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Who is an Actuary?

These were the roles of Accountant and Actuary.

Accountant vs. Actuary Infographics

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Comparative Table

Basis of Comparison ACCOUNTANTACTUARY
Related toThe flow of money through an organization or a businessRisk and its financial consequences
MeaningDescribes the financial health of a company, individual or organizationThey calculate the risk factor and determine premiums with knowledge of business and finance
DutiesDetermining payrollPayroll refers to the overall compensation payable by any organization to its employees on a certain date for a specific period of services they have provided in the entity. This total net pay comprises salary, wages, bonus, commission, deduction, perquisites, and other benefits.read morePayroll refers to the overall compensation payable by any organization to its employees on a certain date for a specific period of services they have provided in the entity. This total net pay comprises salary, wages, bonus, commission, deduction, perquisites, and other benefits.read more requirement
Completing company audits
Issuing invoices and explaining accounting policiesAccounting policies refer to the framework or procedure followed by the management for bookkeeping and preparation of the financial statements. It involves accounting methods and practices determined at the corporate level.read moreAccounting policies refer to the framework or procedure followed by the management for bookkeeping and preparation of the financial statements. It involves accounting methods and practices determined at the corporate level.read more
Prepare profit and loss statement
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Creating financial solutions
Analysis and risk management
Developing research data
Create strategies for the benefit of the policyholders.
TypesPrivate and Public accounting, National Income FormulaNational Income FormulaThe national income formula calculates the value of total items manufactured in-country by its residents and income received by its residents by adding together consumption, government expenditure, investments made within the country and its net exports.read more, Fiduciary accounting, Government or Fund accountingFund AccountingFund accounting is a method used by non-profit organizations and governments to account for funds or grants received from individuals, grant agencies, governments, or other organizations who have placed restrictions or conditions on how the funds from the grants are utilized (condition could be implemented on full funds or part of the funds as per the donor).read more, and Investment accounting.Actuaries in Insurance companies
DesignationsCertified Management Accountant (CMA), Certified Public Accountant (CPA), Certified Internal Auditor (CIA)Certified Internal Auditor (CIA)A certified internal auditor (CIA) is an accountant recognized as a certified internal auditor conferred by the Institute of Internal Auditors (IIA) in internal audits after passing CIA exams and upon completing the required work experience.read more, Certified Financial Manager (CFM)Mathematicians, Statisticians, Extensive knowledge of probability are the main areas where Actuaries picked from
PreferenceHighly preferred in any kind of companies and organizationsHigh in insurance companies and investment banks

Conclusion

Why the Accountant and Actuary are important is the question that matters overtime in recent years.

Both are important in their own ways in the financial world. However, the roles and duties are broader for an accountant, and they are quite specific for an actuary. One cannot replace the other requires a different set of skills and qualifications to become successful in their own genres.

  • Creating financial solutions
  • Analysis and risk management
  • Developing research data
  • Create strategies for the benefit of the policyholders.

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