For common people, investigation and audit are nearly the same, but this is a wrong assumption. There is a significant difference between these two. In this article, we will try to get the concept of investigation & an audit & what is the key difference between them. An investigation is performed to prove a certain fact but the auditing is carried out to check the extent of integrity and truth of the financial records of a business. The scope of the investigation rests on the terms of engagement whereas auditing scope is based on the auditing standards. It is quite natural that people become confused within these two terms due to insufficient understanding & proper knowledge. So read the article below to get a clear cut idea about the differences between investigation & auditing:
Major Differences between Auditing & Investigation
- >Â The investigation is done for some specific purpose based on the need of the situation whereas the objective of auditing is to express an opinion on the financial statements of the concern.
- >Â The investigation may be conducted on behalf of the third parties whereas auditing is taken on behalf of the proprietor of the business.
- >Â The scope of the investigation is limited to answering only those questions that are considered in the engagement letter. On the other hand, auditing lies in providing an opinion on the firm’s financial statement.
- >Â The investigation of books of accounts and records is not legally compulsory on the contrary, auditing is compulsory in the case of Joint Stock Companies.
- >Â The evidence gained from the investigation process is critical whereas the facts gained from the audit process are influential.
- >Â The investigation report is provided according to the requirement of the situation while the audit report is prepared as per the act.
- >Â While the period covered by an investigation is determined by the objectives and it may be for a week, month, or stretch to several years; an audit examination normally covers the accounting year of the client.
- >Â For investigation, there are no legal requirements as to disclosure of information in an investigation whereas for auditing the auditor is legally required to guarantee complete disclosure of the information as prescribed.
- >Â Unlike auditing that qualifies only Chartered Accountants to conduct an audit, investigation can be conducted by a practicing Chartered Accountant.
The above mentioned are some of the important differences between investigation and auditing. There can be a lot more differences, however, to comprehend the basic difference between the two, the distinctions as referenced above, are sufficient. However, keep one thing in mind, both investigation and auditing are two fundamental notions of a business & even any minute errors in any of them will badly impact the whole business. So it is better to take the advice and guidance of the best professional business consulting services as they can easily help you offer you a fuss-free solution to your business issues.
Though you are now seeking the bestÂ investigative & auditing services in UAE,Â then stop searching, here is your ideal choice for the smooth running of your business dealings- ARC Associates. We are one of the leading auditing & accounting services in UAE, having branches in Dubai, Abu Dhabi & Sharjah. We can take care of all your business needs & requirements as per your terms. We have a team of skilled professionals to deliver quality-oriented services on time which will definitely give you more value to your business. Feel free to contact us today if you have any enquiries about your business dealings.