The key difference between investigation and conventional auditing is that an investigation has a specific objective:
It most cases it has been triggered by an alert, report or suspicion - and this has lead to a closer examination of the books.
An audit, on the other hand, is a routine practice meant to ensure that checks are made, regardless of whether there is likely to be anything wrong or not.
You can also look at the difference between investigation and audit n the following areas:
1. The main objective
As mentioned above, the purpose of an audit is to routinely check whether the balance sheet and profit and loss account display correct and up to date reports on the company's performance and its P&L
An investigation is put in place when there is a specific concern or fact that needs to be verified or checked.
2. Who is requesting it
An audit is almost always conducted internally on behalf of/by the owner of the business, whereas an investigation can be ordered by a third party too: Such as a governmental body or a lender.
An audit entails looking at the accounts of a business only, whereas an investigation does go beyond that and analyses any number of matters related to the business, in addition to the accounts.
While it is important that an audit is accurate, and investigation looks to prove something beyond any doubt whatsoever.
An audit is usually scheduling to go on for a limited amount of time, whereas an investigation tends to continue until a theory or concern is proven or disproven.
6. Legal Obligation
Where companies issue joint stock, an audit is a legal obligation. Not all investigations are mandatory by law.