Audit and Investigation Comparison
Auditing and investigation both involve a systematic and critical examination of the available evidence, yet these are quite distinct from each other which is as follows:
Auditing relates to the independent examination of financial information of any entity. when such an examination is conducted with a view to express an opinion.
Audit covers all factual assertions in the financial statements to ascertain their truth and fairness.
The object of an audit is to critically examine the financial statements to ascertain their truth and fairness.
Auditing is a routine exercise generally an accounting year.
To enhance the degree of confidence of intended users in the financial statements.
Auditor may be appointed by the owners or shareholders.
The audit is conducted in accordance with the Generally Accepted Auditing Procedure.
Auditor is skeptical and not suspicious.
Audit evidence is persuasive.
Extent of Checking:
Test checking or sample checking is allowed.
Auditors reports to the owners. for example-Share holders.
Investigation relates to systematic, critical and special examination of the records of the business for a specific purpose.
Scope is limited as regards the period or area to be covered.
Investigation aims at ascertaining certain facts such as fraud, tax liability, value of shares etc.
Investigation may spread over a period longer than one year.
To establish a fact or assessing a particular situation.
Investigator may be appointed by the owners or management or even third parties.
Investigation involves an extended auditing procedure.
Investigator starts his work with suspicion & collects evidence to either confirm or dispel that suspicion.
Investigator relies on conclusive.
Extent of test checking:
In investigation particularly to detect frauds, test checking may not be advisable.it may be necessary to check 100%
Investigator reports to the person on whose behalf he has undertaken the investigation.
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