Auditing is an unbiased and methodical examination of the financial statement of an entity to give an opinion on an accurate and fair view. The word “financial statement” may incorporate Balance Sheet with Notes to Accounts, Income Statement, and Cash Flow Statement.
Investigation implies that for a business organization, an organized, detailed, and critical examination of the books of accounts and transaction documents (both past and present) of an item.
Audit services in Dubai is mainly conducted to confirm the extent of truthfulness and correctness of the financial records of an item, and the reason behind doing the investigation is to prove an absolute fact. On the other hand, the investigation is conducted for a specific purpose or to reveal a truth or to establish a reality with the help of evidence.
The scope of the Auditing depends on the Standards on Auditing, but the scope of the investigation relies on the terms of engagement. The range of Auditing is standard, which attempts to give a viewpoint on the financial statement of the company. On the other side, the scope of the investigation is limited as it tries to answer only those mysteries that are asked in the engagement letter.
- Dealing with Results:
Auditing is a process of identifying whether the results of accounting information are accurate and according to the specified norms or not. An investigation is a close examination of specific records to highlight a fact.
The nature of Auditing is a general, while the investigation is critical in the environment. Moreover, the evidence obtained from the audit process is persuasive. Conversely, the quality of evidence obtained from the Investigation process is conclusive.
- Duration of Conduction:
Auditing is carried out every year, but the investigation is undertaken as per the needs of the organization.
- Performers of Process:
Auditing is conducted by the auditor, whereas an expert team performs an investigation.
Auditing verifies the accurate and fair view of the financial statement while the investigation is performed to establish a fact.
The selection of an auditor is made by the shareholders of the company. On the other hand, an investigator is appointed by the owners/management or one-third party.
Auditing is a general process which is typical for all the organization, as it is performed annually. It can be achieved by either the inside auditor or external auditor. The internal auditor is a worker of the organization who is appointed by the management while the government appoints the outside auditor.
The investigation is pretty rare, as it is not commonly done in any organization. A specialist team is brought to the organization to carry out it and report the relevant data. The audit report is presented to the interested parties like stockholders, suppliers, creditors, government, management, etc. whereas the investigation record is handed over to the party who organized the investigation.