Where there is nothing to excite suspicion very little inquiry will be reasonably sufficient.

What is reasonable care in any particular case must depend upon the circumstances of that case.

The duty of the auditor is to be honest i.e., he must not certify what he does not believe to be true, and he must take reasonable care and skill before he believes that what he certifies is true.

The object was to ensure that the shareholders received “independent and reliable information respecting the true financial position of the company at the time of the audit.”.

It was noted that the auditors were to be appointed by the shareholders, and were to report to them directly, and not to or through the directors.

The judge summed up auditor’s duty by stating, “Auditor is a watchdog, not a bloodhound.”.

The perception of auditor’s duty with regards to detection and prevention of frauds and errors was initially based on the decision given in Kingston Cotton Mills Co.

What do you mean by the phrase that the “auditor is a watchdog and not a bloodhound”?

Perform such other functions related to the above.Oversee the quality of service of the professionals (such as auditors, CFOs, etc) and suggest measures required for improvement in the quality of service.Monitor and enforce the compliance of the accounting standards and auditing standards.

Make recommendations on the foundation and laying down of accounting and auditing policies and standards.The NFRA has the following responsibilities: The NFRA is a body constituted under the provisions of Section 132 of the Companies Act, 2013. NFRA “Auditor is a watchdog and not a bloodhound” is a serious misconceptionĪudit regulator National Financial Reporting Authority (NFRA) has urged the audit fraternity to refrain from taking shelter under the adulated description of the auditor “being only a watchdog and not a bloodhound”.

Financial watchdog meaning