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Both the processes of auditing and investigation look seemingly similar. However, essentially, they are very different from each other. The process of verifying the extent of truthfulness and fairness of the financial records of an entity is called auditing and investigation is an examination which is performed to ascertain a certain fact. This piece of writing discusses the 11 main differences between auditing and investigation.
Auditing is a process where impartial and methodical examination of the financial statements is undertaken of an entity to give an opinion on the true and fair view of such statements. The objective of auditing is to check the financial accuracy and reliability of the financial statements and see to whether the statements are in conformity with the applicable laws, rules and regulations. An auditor while conducting the audit[1] broadly focuses on the following three things:
Investigation is a process which has been undertaken for a special purpose with the objective of discovering a truth or to ascertain a fact. In case of a business entity, investigation translates into critical examination of the books of accounts and transactions’ history of the company with the objective of revealing the truth or establishing facts with the help of evidence. Methods employed by the investigating party during investigation include search, observation, inquiry, inspection, interrogation etc.
Following are 11 main differences between auditing and investigation:
It can be concluded from the differences mentioned between auditing and investigation that auditing is a general process done annually by the organisations whereas investigation takes place on an ad hoc basis and on case-to-case basis. An expert team is brought to conduct the investigation and submits the investigation report to the party who organised the investigation.
Read Our Article: All about Forensic Audit of a Company in India
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