Distinguish between: Auditing and Investigation

Auditing and Assurance Revision Questions and Answers

 Objects: The object of auditing is to find out whether Financial Statements give a true and fair view of business. Investigation is undertaken to know the essential facts about a matter under inquiry. It is done with some special purpose of view.

 Period: Auditing usually covers one accounting year. Investigation may cover more than one accounting year.

 Legally Binding: Auditing is conducted for proprietors or is normally legally binding. Investigation is carried out on behalf of any party interested in the matter.

 Scope: Auditing is legally compulsory for companies & restricted to the financial statement. Investigation is voluntary and carried out on certain circumstances & may be carried out beyond the financial statement.

 Time: Auditing may be conducted at the year end. Investigation may be conducted at any time in case of suspicion about any transaction.

 Report: In auditing form of report is prescribed. In investigation it is not prescribed.

 Appointment: In auditing appointment is made by shareholders in AGM. In investigation appointment can be done by other delegated authorities.

 Qualification: Auditors qualification is prescribed by Laws. Investigators qualification has not prescribed by Laws.

 Re-work: Re-audit is not generally carried out. Re-investigation may be carried out.

 Perception: Audit is not carried out with doubtful mind. Investigation may be carried out with doubtful mind.

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