Define the term Investigation and differentiate between auditing and investigation

INVESTIGATION :
Meaning :- When for a special purpose an inquiry is made into the accounts of the business it is called investigation.
In other words, we may say that audit which is conducted for a particular object is called investigation.
To know the actual financial position of the business it is used to examine the books of accounts. We may say that investigation is a kind of special audit.

DIFFERENCE BETWEEN AUDIT AND INVESTIGATION :-
Following are the important distinctive features in both the term.

1. Interested Parties :-
Investigation : Investigation is carried out on behalf of the outsiders who want to know the financial position of the business.
Auditing : audit is conducted on behalf of the share holders.

2. Nature Of Work :-
Investigation : Investigation is not compulsory.
Auditing : Audit is compulsory in case of joint stock company.

3. Nature Of Report :-
Investigation : investigation report is positive.
Auditing : Audit report have certain short comings.

4. Submission Of Report :-
Investigation : The report of the investigation is submitted to the party appointed him for investigation.
Auditing : The report of audit is submitted to the share holders.

5. Concern With Financial Policy :-
Investigation : Investigation has no concern with the financial policy of the company whether it is followed or not.
Auditing : Auditor has to state the facts about it whether it was followed or not.

6. Net Profit Calculation :-
Investigation : Actual earning capacity r the net profit of the business is calculated in case of investigation.
Auditing : While it is not so in case of audit.

7. Duplication :-
Investigation : Investigation may be conducted even the accounts are audited.
Auditing : Audited accounts are not audited again.

8. Checking Method :-
Investigation : Investigation is a thorough checking of the books of account for a particular or number of years.
Auditing : In case of audit test checks are applied.

9. Time Duration :-
Investigation : Investigation may cover a period extending over three to seven years.
Auditing : The audit of accounts usually covers the period of one year.

10. Nature Of Object :-
Investigation : Investigation is conducted for a particular purpose or object.
Auditing : The object of auditing is to find out the correctness of statements and exhibit a true and fair view about the affairs of the business.