Entry in progress—B.P.
What is an auditor a watchdog or a bloodhound?
The company’s internal auditor is a watchdog, making sure rules are being followed. An external auditor is a bloodhound looking for rules that have been broken.
26 August 1939, The Wall Street Journal, “Following The News” by B. H. McCormack, pg. 4, col. 3:
Mor than half a century ago Lord Lopes, British jurist, put the problem succinctly. Speaking of auditors, he said: “He is a watchdog, not a bloodhound.”
Auditors: ‘Watchdog OR Bloodhound’? by Janet Morgan, Contributor
Source: Financial Gleaner, October 27, 2000
IN the famous case Re: Kingston Cotton Mills Co. (1896), Lord Justice Lopes defined an auditor’s duty of care as follows:
“It is the duty of an auditor to bring to bear on the work he has to perform that skill, care and caution which a reasonably careful, cautious auditor would use. What is reasonable skill, care and caution must depend on the particular circumstances of each case. An auditor is not bound to be a detective, or, as was said to approach his work with suspicion, or with a forgone conclusion that there is something wrong. He is a watchdog, not a bloodhound. He is justified in believing tried servants of the company in whom confidence is placed by the company. He is entitled to assume that they are honest and rely upon their representations, provided he takes reasonable care.”
“An #auditor is not bound to be a detective…he is a watchdog, not a bloodhound.” #BritishJudge declared in 1896 #Deloitte #PKMG #PWC
1:27 AM - 6 Jan 2015