hello dear students welcome to device commerce and management academy auditing class introduction is over and also objects of auditing i taught you now today very important topic that is auditor is a watchdog not a bloodhound how do you justify this this is the important case we have to discuss and i'll give you a detailed explanation about this very important so this is the case happened in the year 1986 in this year so what is this case is this a famous case the case is kingston cotton mills company kingston cotton mills company 1986. in this case lobster lj loves lj so he has given this statement that auditor is a watchdog not a bloodhound why why this is given means the duties of the auditor has mentioned in this case auditor is appointed by the company owner or the client to observe the things honestly he has to do his duties and he has to find out the frauds he has to prevent the frauds he has to find out the mystics he has to prevent the mystics that's it this is the duty he is not a bloodhound he's just like a watchdog he'll be watching everything and he'll not be doing any work like a detective he's not a detective and simply watching and also giving a signal to the client or the owner of the company who has appointed this auditor what is going to give the main important is the thing is that something is happening frauds are more mistakes are more so you have to be alert in particular department there you are finding a lot of mistakes there we are finding lot of manipulations like he has to give a hint hint and making alert the client not anything else he has to do his work simply checking out all the transactions all the accounts checking out final account this accounts ledgers trial balance everything whether it is supporting with the evidence or not he has to check whenever he finds any kind of mystics any kind of rods making a note and bringing into the knowledge of the owner bringing into the knowledge of the client at the end of the day he'll be writing a report you know audit report so there he can mention it but not having any conflict with anyone directly attacking the employees like accountants senior accountants or branch manager or someone not attacking not harming anyone not giving pain to anyone not to enter into any kind of disputes this is the duty of the auditor in short you can say when this is asked auditor is a watchdog not a bloodhound it means you can talk about duties of an auditor so this is nothing but duties of an auditor what are the duties of an auditor in fact you can say that duties of an auditor or objects of an auditor we have already discussed objects of an auditor auditor objects means it's his duties only we have discussed in the last class right main objects subsidiary objects main objects we know it's substitute objects mainly detection and prevention of rods detection and prevention of mystics these are the main i mean subsidiary objects so there whatever we have discussed that you can talk in this lecture like auditor is a watchdog not a bloodhound duties of an auditor is nothing but the same one only now let let us discuss very clearly about an auditor is a watchdog two statements are there here an auditor is a watchdog this is one statement another statement is that an auditor is not a bloodhound two statements an auditor is a watchdog and an auditor is not a blood hardware so let's talk about the first statement auditor is a watchdog means what is the duty of an auditor is to just observe to check the transactions to check the accounts and if he finds any kind of errors or frauds it has to bring it into the knowledge of the client or the owner right so that's it and he should not involve in any kind of activities other activities and entering into the politics and sometimes giving support to someone and sometimes behind some other people like this kind of activities he is not suppose he must be always neutral and also he must be honest to his duties and he must work out sincerely to detect the frauds or errors this is the duty like he's a watchdog observing if you see a dog in front of your gate if you kept a dog if someone comes it barks and it gives a signal to the owner that someone has come right so in the same way he has to give the signal we're not literally saying that he is a dog the duties whatever duties blocked us making alert the owner and taking care of the house taking care of everyone in the family and behaving like a family of the people be behaving like a well wisher of the family like his duty his behavior must be like a watchdog at home okay and an auditory second statement is that an auditor is not a bloodhound means he need not to be behave like a bloodhound bloodhound means you know like uh detective and behind everyone and chasing it a lot like james107 not required this much of challenging heroism it is not required it is not the duty of the auditor editor is not a bloodhound so he is just like a watchdog and he has to observe and he has to mention everything so when this is asked in the exam how to write is first thing is that you keep aheading discuss about this case in this case it has mentioned by the judge what is what is his name love c loves lj he has mentioned he has given a statement that auditor is not a watchdog auditor is a watchdog but not a bloodhound and how it is possible take paragraph one two in paragraph one first paragraph you write about ah supporting the statement that auditor is a watchdog the second paragraph you can talk about editor is not a blood hunt means it is not his duty to be behind in depth of any information just he has to mention it he has to he should not enter into any kind of quarrels any kind of politics any kind of disputes so all these things it is not his duty that you can mention it in the second paragraph then after that you can talk about the objects of objects or duties of an auditor what is his duty first thing is that number one number two first one is that detection of errors and frauds detection of errors and frauds let's focus on the detection only detection part of the errors and frauds error means you know that it is by mistake something some mistake happened any mistake happened by mistake so that is error fraud intentionally deliberately has done something so that is fraud okay intentionally now detecting such kind of errors and frauds what happened from right from the beginning basics of accounting journal entries ledgers trial balance everywhere he is checking out anything is missing like we have seen types of errors types of rods also did you remember types of rods so manipulation of cash manipulation of goods and manipulation of accounts and in the same way types of errors five types of errors are there he must be having full confident full confidence about such kind of frauds and errors which can take place and in which transaction so that knowledge he must have then after that detection is over then after detection prevention is also important detection is over then after that prevention one time we came to know that this kind of errors are repeating this kind of rods are repeating then prevention how to prevent it simply keep on observing keep on noting out it is not going to work you have to prevent also what are the preventions what actually can take it and what kind of suggestions he wanted to give it to the management that is prevention of errors and frauds so these are the main duties of the auditor so here you can discuss about objects of auditing already we have discussed objects of auditing like frauds and errors so the same points you can mention in short according to the question how many marks question they are asking it's according to the same one you can elaborate it and after that end of the end of this lecture you can talk about sga means standard audit 240 standard of audit 240 it is saying that the auditor's responsibilities relating to fraud in an audit of financial statements auditor's responsibility in case any fraud is there any mistake is there that's quite common he has to identify but what about the fraud in case of rod that is mentioned in the standard order st always you'll be finding in this auditing subject html standard or it standard audit 240 this is revised it is saying that the responsibilities of auditor in case of fraud if he finds any kind of fraud it is the minimum responsibility of the auditor to bring this matter bring this fraud into the knowledge of the client knowledge of the owner and he has to inform that this kind of rods are happening in which department and who is doing it who is responsible to this and all these things he has to mention it to the client or sometimes he may write it in the even report also but not to take any kind of revenge or not to take any kind of direct conflicts with the contents and who is responsible for them he is not supposed to do just simply has to inform just like a watchdog that's it so that's about auditor is a watchdog but not a bloodhound right so related to the auditing we'll see more classes in the coming videos by the way did you subscribe to our channel if you follow any of the talk if you like that video if you followed that video that concept please give a like it doesn't cost much right and in the same way please don't forget to share these videos with your near-end dear friends juniors seniors whoever it may be it will be helpful for them but remember you always stay connected study well throughout the year before exams revise it follow this principle you'll be the topper trust me good luck