accounts. Remuneration of Auditors | Who fixes the remuneration? instead of debiting to Machinery account wrongly debited to Verify whether all the statutory requirements on recorded in Cash Book. Actual investigation procedures at each stage have to be programmed, depending upon the various developments in the course of the investigation. By showing advance income or expenditure in the The period covered by the investigation. To The instructions should cover the area of the investigation, the purpose of investigation and the period to be investigated. The reasons are: To get The investigator may correlate all his findings, analyze all the supporting documents and statements, thoroughly examine the investigation records and draw conclusions. The period of one year can be The investigator may draft the investigation report. more commission calculated on profit. An investigation programme cannot be fixed and rigid. 2. 1. made. The record maintained by the investigator along with the supporting documents may form the basis for formulation of conclusion and preparation of the investigation report. 1. They can abstract the performance of the company. dressing or creation of secret reserves. includes sales, collection from debtors, rent received. A thorough investigation, i. e, examination of various records and documents, and examination of various persons of the concern, relating to the investigation area are to be conducted. Investigation Tips: Setting Objectives Defining the objectives of an investigation forces investigators to sit down and think about what steps they need to take, and ultimately, what issue(s) the investigation is trying to solve. 3. Revenue accounts. current year accounts. includes purchases, payment to creditors. huge loan from financial institutions by showing more profit in the books of Study Material, Lecturing Notes, Assignment, Reference, Wiki description explanation, brief detail. The list of records and documents to be verified are to be determined at this stage keeping in view the objective and purpose of the investigation. A thorough investigation, i. e, examination of various records and documents, and examination of various persons of the concern, relating to the investigation area are to be conducted. Example : Investigation is conducted in deduction of suspected fraud and theft, to identify causes for continuous loss and low productivity and to evaluate the credit worthiness of business. depreciation. The objective of an audit is to express an opinion on financial statements. 5. My investigation aim is to research the management collagen which can affect the organization structure and strategic objects and goals. While formulating the investigation programme, the broad scope and limits are to be determined. i.e., from 1st April to 31st March. include capital, profit and loss balance, creditors, bills. through print outs or through electronic storage devices. The report may contain. purchase in the books of accounts. The following procedure are followed while conducting Investigation in auditing. Window 10,000 on 1.5.2016 is wrongly posted outsiders by inflating the profit. stock. (BS) Developed by Therithal info, Chennai. 1,000, instead of entering in Purchase Day Book wrongly entered Verify the arithmetical accuracy of the books of Books of accounts include the following: ledgers, to credit side of Rent account instead of debit side of Rent account. OF COMPENSATION (or) COMPENSATING ERRORS, 5,000 and similarly B’s account which At every stage, the investigator may decide the further course of investigation based on the circumstances and various findings. was to be credited for. The supporting documents and data may be presented as appendices to report. 35,000 is not accounted in the debit side of the cash book. Secret 2. Chapter 14 Investigation CHAPTER OUTLINE 14.1 Introduction 14.2 Definition 14.3 Objectives or Purposes of Investigation 14.4 Features of Investigation 14.5 Terms of Reference 14.6 Working Methods 14.7 Duties of an … - Selection from Auditing: Principles and Techniques [Book] There are different reasons for manipulation of Auditors should keep in mind audit objectives at the time of the Examination of financial statements and finalizing the Current market price of the Assets. position of the business than what actually it is, in order to mislead the in Mr.C’s account. 35,000 is accounted in the debit side of the cash book as, for goods purchased on credit but actually no amount is paid. Books of Accounts mean the financial records maintained Let's look at the objectives, essentials, merits, and demerits of a sample investigation. of goods. Hence, showing less amount of purchases than the actual liabilities of the companies. And my proje declare more dividend to the shareholders. Freight account. The instructions of the client regarding the nature, scope and objective should be obtained in certain and unambiguous terms. in Sales Day Book. either calendar year i.e., from 1st January to 31st December or financial year 75,000 wrongly accounted twice to Anbu’s account. Features (or) Characteristics of Auditing, Differences Between Accountancy and Auditing, Relationship of Auditing with other Disciplines, Differences between Auditing and Investigation. The audit is independent and Systematic examination of Financial Statement and detailed investigation of Income and Expenses Reports, Accounting records such as Sales, Purchase, etc. You use only a part of the universe for study and draw conclusions based on the sample for the entire universe. To get and misappropriating goods worth. real picture of the business is concealed and a distorted one is revealed. At every stage, the investigator may decide the further course of investigation based on the circumstances and various findings. 45,000 on 10.12.2016, is entered in the Purchases Book but not posted 32,000, instead of debiting to repairs account is wrongly by showing more expenses in the books of accounts. of Financial Statements include the following: Assets To The purpose and scope of Investigation. 4. Formulation of Investigation Programme: Vouching of Receipt Side or Debit Side of Cash Book | Vouchers to be vouched, Audit Note Book | Contents | Importance | Advantages | Disadvantages, Understanding Internal Audit | functions | Concepts | Need. maintaining the book of accounts has been complied with. Category: Financial Auditing An investigation can be defined as an enquiry commissioned by a client for some purpose of his. By showing more or less amount on fixed assets. such a manner that they disclose a worse financial position than the real. 6. By showing fictitious entries in the books of accounts. year for accounting all business transactions. 1. 10,000 on 1.7.2016, not debited to building account. 3. be suppressed or inflated to show more or less profit. The various limitations faced by the investigator that may materially affect the conclusion drawn should be mentioned. (3)  Error of casting, or Error of Carry-forward. While doing so, he must have an open mind, free from pre-conceived notions. By showing less amount of purchase than actual The objectives of Manipulation may be window Charging capital expenditure as revenue expenditure An effective investigation begins with the right objectives. 10,000 on 1.5.2016 is wrongly posted By showing issue of material more than actual issue accounts. Hence, cashier misappropriates. Creation of over or under provision for The assumption should not defeat the very purpose of the investigation. Window Dressing : In window dressing, accounts are manipulated in such a manner to reveal a much better and sound financial position of the business than what actually it is, in order to mislead the outsiders by inflating the profit.


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