An investigation is a thorough and in-depth examination of specific areas either to establish a fact or to evaluate a specific situation. It differs a lot from Audit, a few of which are briefly explained below.
Differences between an Investigation and an audit
A normal audit differs from an investigation in several aspects. The following are the main differences:
Difference in Aim:
In normal audit, an auditor expresses his opinion on the financial statements, on the basis of sufficient evidence collected by examining the documents and records.
An investigation aims to establish a fact, on examination of specific records and documents.
Difference in Scope and Objectives:
In an normal audit, the scope and objectives are general and broad whereas in investigation, the scope and objective are specific and narrow.
Difference in Evidence:
In an audit, a persuasive evidence is sufficient for an auditor, to form an opinion. In investigation, substantive and conclusive evidence is required to establish a fact.
In short, an audit involves examination of documents and records and forming an opinion on the financial statements, whereas an investigator, may not presume a figure or a stated fact as correct, even though there is no reason to believe that the circumstances are suspicious.
Unlike the investigator, the auditor is to verify the accounting conventions, policies and disclosure requirements of financial statements.