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TYPES OF INVESTIGATION..

Manjunath M Hegde (CA Final (new course)) (236 Points)

20 March 2009

GUYS CAN YOU HELP ME OUT..AM PREPARING FOR MY TY BCOM FINAL EXAMS, CAN YOU PLEASE TELL ME WHAT ARE THE DIFFERENT TYPES/CLASSES OF INVESTIGATIONS? IN PCC WE WERE ONLY EXPECTED TO KNOW THE DIFFERENCE BETWEEN AUDIT AND INVESTIGATION...I COULDNT FIND THE TYPES OF INVESTIGATION IN ANY REFRENCE BOOK eEITHER..

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5 Replies

Pankaj Khadaria (1 Points)
Replied 08 March 2016

I am a student of m.com final subject abst please help me to give a answer of "types of investigation? "

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Sathish M (Management Accountant) (40581 Points)
Replied 09 March 2016

KINDS OF INVESTIGATION :-

Following are the important kinds of investigation :

1. Investigation for the purchase of a business.

2. Investigation for preparing report.

3. Investigation for credit purpose.

4. Investigation for investment.

5. Investigation for the detection of fraud.

6. Investigation for incoming partner.

Sathish M (Management Accountant) (40581 Points)
Replied 09 March 2016

OBJECTS OF INVESTIGATION :-

1. Detection Of Concealed Income :-
To detect the undisclosed income investigation is made on behalf of income tax authorities for the tax liabilities.

2. Purchase Of Business :-
Some times any one person or firm wants to purchase the business. So ti know the financial position and earning capacity of the business investigation is made on the behalf of the purchasers.

3. Credit Purpose :-
Sometimes bank or client wants to grant the loan to a business. So investigation is made on his behalf to know the financial position of the firm.

4. Entry Of New Partner :-
A new man who wants to enter into the business he will also try to know the financial condition of the business. Investigation can also can be made on the behalf of the incoming partner.

5. Purchase Of Shares :-
If any client wants to purchase the shares of the company, investigation can be conducted on his behalf to know the real position of the company.

6. Doubt Of fraud :-
If proprietor of a business is doubtful about the real position of the business, investigation may be conducted on his behalf.

7. Business Removal :-
In case of a compulsory removal of business, investigation is conducted to find out the amount of compensation payable.

8. Case Of Misappropriation :-
On behalf of the beneficiaries investigation may be conducted where the trustees are suspected of fraud or misappropriation.

9. Auditors Negligence :-
If there is a charge of negligence on auditor then investigation may be conducted on behalf of the company or any person.

10. Misfeasance Or Fraud :-
If auditors are suspected of fraud or misfeasance investigation may be conducted on the behalf of the company's liquidator.

11. Insurance Claims :-
Investigation may be conducted for claims under insurance policy covering the losses.

12. Merger :-
Investigation object may be merger of two or more than two organizations. The rights of shareholders in all can be protected on the basis of investigation reports.

13. Taxation :-
Investigation object may be the tax justification. To determine the income tax investigation can be made by the income tax department.

14. Investment Decision :-
Before investing the capital investor may investigate into the business matters for making decisions to buy or not to by the shares.

15. Business Promotions :-
Promotion of business may be the object of investigation. The investigator can guide management for the promotion of sale and business activity.

Prachi Bansal (3129 Points)
Replied 19 April 2021

Investigation in the case the firm wants to introduce a new product or introduce a new software.

Sanjay (hhgh) (0 Points)
Replied 05 May 2023

Types of investigations in auditing :

Financial Statement Audit: This type of investigation is conducted to ensure that the financial statements of an organization provide an accurate and fair representation of the organization's financial performance and position.
Compliance Audit: This type of investigation is conducted to ensure that an organization is complying with relevant laws, regulations, and internal policies.
Operational Audit: This type of investigation is conducted to evaluate the efficiency and effectiveness of an organization's operations, such as its processes, systems, and procedures.
Fraud Investigation: This type of investigation is conducted to identify and investigate instances of fraud or other illegal activities within an organization.
Internal Audit: This type of investigation is conducted by an internal audit department within an organization to assess its internal controls and identify areas of risk.