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    Investigation

    Uploaded by

    Sanjana Pradhan
    Investigation

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    © All Rights Reserved
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    Investigation

    Uploaded by

    Sanjana Pradhan
    12 views1 page
    Investigation

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    Investigation

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    12 views1 page

    Investigation

    Uploaded by

    Sanjana Pradhan
    Investigation

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    Investigation

    Meaning of Investigation
    Investigation refers to a detailed, in-depth examination of financial records, accounts, and transactions
    of a company or individual to uncover specific facts or gather evidence about a particular matter, such
    as fraud, embezzlement, or business irregularities. Investigations are typically carried out with a
    specific objective in mind, such as detecting fraudulent activity, assessing financial health for
    acquisition, or supporting legal action.

    Objectives of Investigation
    1. Detection of Fraud: Uncovering fraudulent activities, misappropriation of funds, or other
    financial irregularities.
    2. Acquisition or Sale: Verifying the financial health and valuation of a business when it is being
    considered for acquisition, merger, or sale.
    3. Legal Proceedings: Gathering evidence to be used in court or legal disputes involving financial
    matters.
    4. Due Diligence: Examining the financial position and operational efficiency of a business for
    investment or partnership purposes.
    5. Suspected Irregularities: Investigating specific transactions or accounts when there is
    suspicion of irregularities.
    6. Statutory Requirements: Conducting investigations in response to statutory or regulatory
    requirements (such as under SEBI or RBI guidelines).

    Differences between Investigation and Audit


    Investigation is an in-depth inquiry aimed at uncovering specific details about financial transactions,
    fraud, or irregularities, often with legal or strategic objectives. Audit, on the other hand, is a regular
    and compulsory examination of financial statements to ensure that they present a true and fair view
    of the company’s financial position, following accounting standards. In essence, investigations are
    targeted, purpose-driven, and often voluntary, while audits are broader, statutory, and cover overall
    financial health.

    Basis Investigation Audit

    Specific purpose such as fraud General purpose of verifying the truth


    Purpose
    detection, valuation, etc. and fairness of accounts.

    Focuses on a particular aspect or Covers overall financial statements and


    Scope
    period as per objectives. accounts of a period.

    Usually voluntary, except when Mandatory under the law for companies,
    Mandate
    mandated by law or regulation. as per the Companies Act.

    Detailed and in-depth examination of General examination of books of


    Nature
    specific matters. accounts for correctness.

    Can cover any specific period or aspect Covers a defined financial year, typically
    Period Covered
    of accounts. 12 months.

    Can be conducted by auditors or Conducted by a qualified Chartered


    Appointment
    specialists with expertise. Accountant (CA).

    Legal Usually carried out on demand (not Compulsory for companies as per
    Requirement mandatory, unless required). statutory requirements.

    No standardized format; depends on Standardized audit report, based on


    Report Format
    investigation needs. auditing standards.

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