Looking at the object you found more closely, you notice there are multiple knobs on both sides. The face of the object does indeed have the image of a different animal every ten degrees, or... now that you think about it, it kinda resembles a watch more than a compass. There's a human figure in place of the 12, where the arrow hand is pointing, and other creatures where each of the other numbers would be on a clock. Twisting the center knob on the right side, the arrow you previously thought was a magnet compass dial begins to move clockwise around the face, revealing a second, thinner hand underneath, almost like a minute hand.
"What a weird watch," you think, chalking it up to some careless, animal-obsessed child that lost it in the sand pit.
You continue to spin the hour hand until it points downward, directly at the picture of a dog with large, pointed ears and a regal posture. Pulling the nob out a notch, you spin it again and are pleased to see the thinner hand moving smoothly as well. This works just like the Timex you had a few years ago. Not knowing the exact time to set the watch properly, you point it downwards as well, figuring you'll find out the when you get home, and place the watch in your pocket.