| Directors | Auditors |
| – Are elected by members in general meeting | – Are engaged by the company to discharge certain obligations prescribed
by law. |
| – Every company must have a board of directors to manage its affairs.
– The law does not insist that a director profess any profession. |
– Are professionals registered by the relevant body and licenced to practice accountancy. |
|
– Directors stand in a fiduciary position in |
– There is a contractual relationship between an auditor and the company. |
| relation to the company.
– Directors owe their company a duty of care, skill and diligence. The degree of care, skill and diligence expected of them is that of a person of their knowledge and experience. A director is not bound to bring any special qualifications to his office, as observed by Neville J. in re: Brazilhan Rubber Plantations and Estates Ltd. However, if a director posses a particular skill he is bound to exercise the same for the benefit of the company.
– They are not bound to give continuous attention to the affairs of the company and are entitled to rely on information provided by trusted servants of the company. |
– One of the principal obligations of an auditor is to exhibit a degree of care, skill and caution of a reasonably competent careful and cautious auditor, as observed by Lopes L. J. in re: Kingston cotton mills.
– An auditor is bound to approach his task with an inquiring mind and not with a foregone conclusion of wrong doing.
– He must sensure that errors of commission and omission and downright untruths are ascertained. However, it is not his obligation to discover all fraud as he is not an investigator. “He is a watchdog but not a blood hound”
– His task is not to ensure that the computation is correct. He is not a stock taker. “He is not to be written off as a professional adder-upper and subtractor.” But must satisfy himself that the company‟s security exist and are in safe custody. |