Basis | Investigation | Auditing |
1.Interested Parties | Investigation is carried out on behalf of
The outsiders who want to know the financial position of the business | audit is conducted on behalf of
The share holders |
2. Nature Of Work | Investigation is not compulsory | Audit is compulsory in case of
Joint stock company |
3. Nature Of Report | Investigation report is positive | Audit reports have certain short
Comings. |
4.Submission Of Report | The report of the investigation
Is submitted to the party appointed him for investigation | The report of audit is submitted
To the share holders |
5.Concern With Financial Policy | Investigation has no concern
With the financial policy of the company whether it is followed or not. | Auditor has to state the facts
About it whether it was followed or not. |
6. Net Profit Calculation | Actual earning capacity r the
Net profit of the business is calculated in case of investigation. | While it is not so in case of
Audit. |
7.Duplication | Investigation may be conducted
Even the accounts are audited. | Audited accounts are not audited
Again |
8. Checking Method | Investigation is a thorough
Checking of the books of account for a particular or number of years. | In case of audit test checks are
Applied |
9.Time Duration | Investigation may cover a period
Extending over three to seven years | The audit of accounts usually
Covers the period of one year. |
10. Nature Of Object | Investigation is conducted for a
Particular purpose or object | 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 |
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