Differences between Auditing and Investigation

Differences between Auditing and Investigation

Auditing Vs Investigation

1 Meaning

Auditing: Auditing is concerned with examining the accounts and reporting on financial statements.

Investigation: Investigation is the examination of accounts of a business for special purpose.

2 Objective

Auditing: The objective of Auditing is to express an opinion on the financial statements of the concern.

Investigation: Investigation is done for some specific purpose.

3 Compulsion

Auditing: It is compulsory in case of Joint stock companies.

Investigation: It is not compulsory

4 Period

Auditing: Auditing is done at the end of the financial year.

Investigation: Investigation can be done over a period of years.

5 Conduct

Auditing: Audit is conducted on behalf of the owners of the company

Investigation: Investigation is conducted on behalf of outsiders and owners at some times.

6 Scope

Auditing: It is has a narrow scope

Investigation: It has a wide scope

7 Appointment

Auditing: An auditor is appointed by the shareholders or directors or by Government.

Investigation: An investigator is appointed by the outsider.

8 Report

Auditing: Auditor has to give a report about the true and fair view of the final accounts.

Investigation: The Investigator gives a report on the basis of conclusion and enquiries. Expression of the opinion is not necessary.

9 Qualification

Auditing: Only Chartered Accountants are qualified to conduct audit.

Investigation: An investigation need not be conducted by a Chartered Accountant.

10 Process of Work

Auditing: Investigated accounts are not audited in ordinary course.

Investigation: Generally audited books of accounts are taken up for investigation.