Question

State the need of control of Co-operatives. Explain the importance of Audit and taxation in control of Co-operatives.

Answer 1

Answer:

Audit of Co-operative Society

Let us now discuss the provisions for Audit as Per Section 17 of the Co-operative Society Act, 1912 −

The Registrar shall audit or cause to be audited by some person authorized by him by general or special order in writing on his behalf, the accounts of every registered society once at least every year.

The Audit under sub-section (1) shall include an examination of overdue debts, if any, and a valuation of the assets and liabilities of the society.

The Registrar, the Collector or any person authorized by general or special order in writing on his behalf by the Registrar, shall at all-time have access to all the books, accounts, papers and securities of a society, and every officer of the society shall furnish such information concerning the transactions and working of the society as the person making such inspection may require.

Qualification of Auditor

A chartered accountant within the meaning of the Chartered Accountant Act-1949, Or,

A person who holds a government diploma in Co-operative Accounts or in Cooperation and Accountancy; or,

A person who has served as an Auditor in the co-operative society department of the State Government and whose name has been included by the Registrar on the Panel of Certified Auditors maintained and published by him in the official Gazette at least once every year.

Appointment of Auditor

The appointment of an Auditor is done by Registrar of Co-operative Societies. The Auditor conducts his audit on behalf of the Registrar. The Audit fees is paid by co-operative society according to the statutory scale of fees prescribed by the Registrar in this regard according to the category of society. The Auditor is required to submit his audit report directly to the Registrar and one copy of the audit report is submitted to the concerned society.

Rights of an Auditor

As per Section 17, an Auditor can access all the books, accounts, documents and securities of the society.

He has to see that Balance-sheet of the society shows a true and fair view of a business according to information and explanation given to him.

Every officer of the society is bound to give all information regarding working and transactions of the society.

Duties of An Auditor

An Auditor needs to consider the following points to be able to perform his duties in an efficient way −

An Auditor should be well-versed with the Co-operative Society Act, 1912 and the by-laws of the society.

If there is any type of irregularities and improprieties found by an Auditor during his audit regarding Co-operative Societies Act, 1912 and by-laws, he should immediately point out the same.

An Auditor should ascertain that how many shares are held by each member of the society; for this, he should check the member ship registers.

An Auditor should be well aware of power of officers regarding loan, investment, borrowings, advancing of the funds.

He should thoroughly check and vouch the cash book and bank book.

An Auditor should check all the receipts and payments of the society according to standard auditing practice.