‘An auditor is not bound to be a detective’ Explain

‘An auditor is not bound to be a detective’ Explain

In re London and General Bank, Justice Lopes added:

“An auditor is not bound to be a detective or approach his work with suspicion or with a foregone conclusion that there is something wrong.”

An Auditor is a person or a firm appointed by a company to execute an audit. The auditor’s job is to write a report at the conclusion of the audit which determines the level of accuracy and clarity that the organization has accounted for. 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 cast. An auditor is not bound to be a detective, or, as was said to approach his work with suspicion, or with a foregone conclusion that there is something wrong. Hs 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.

In most cases, internal and government auditors are sufficient to manage and monitor the inner workings of the organizations they review. However, independent auditors, who have no connection to the company being audited, help to see mistakes and misleading data that can lead to fraud.

Share This Post