In Section 63 of the Principal Act,-
(i) for sub-section (1), the following shall be substituted, namely;- "(1) Every co-operative society shall get its accounts audited atleast once in each year by the Director of Co-operative Audit or by a person authorised by him by general or special order in writing in this behalf."
(ii) in sub-section (3), the words "or the authorised person," shall be omitted.
(iii) in sub-section (4), the words "or the person authorised", shall be omitted.
(iv) in sub-section (6), for the words "or any officer", the words "or the person" shall be substituted.
(v) after sub-section (11), the following shall be inserted, namely,- 6 “(12) Without prejudice to provisions of sub-section (3), the auditor shall inquire,-
(a) whether loans and advances made by the cooperative society on the basis of security have been properly secured and whether terms on which they have been made are not prejudicial to the interests of the cooperative society or its members;
(b) whether transactions of the cooperative society which are represented merely by book entries are not prejudicial to the interests of the cooperative society;
(c) whether personal expenses have been charged to revenue account; and
(d) where it is stated in the books and papers of the cooperative society that any shares have been allotted for cash, whether cash has actually been received in respect of such allotment, and if no cash has actually been so received, whether the position as stated in the account books and the balance-sheet is correct, regular and not misleading.
(e) whether any special issue or subject matter referred to for enquiry by the Reserve bank or the National Bank has been duly enquired into and report thereof is submitted to the Reserve Bank or the National Bank as the case may be
(13) The auditor shall make a report to the members of the co-operative society on the accounts examined by him and on every balance sheet and profit and loss account and on every other document required to be part of or annexed to the balance sheet or profit and loss account, which are placed before the cooperative society in general meeting during his tenure of office, and the report shall state whether, in his opinion and to the best of his information and according to the explanations given to him, the said accounts give the information required by this Act in the manner so required and give a true and fair view,-
(a) in the case of the balance sheet, of the state of the cooperative society’s affairs as at the end of the year; and
(b) in the case of the profit and loss account, of the profit or loss for the year.
(14) The auditor's report shall also state-
(a) whether he has obtained all the information and explanations which to the best of his knowledge and belief were necessary for the purpose of his audit;
(b) whether in his opinion, proper books of accounts have been kept by the cooperative society so far as appears from his examination of those books, and proper returns adequate for the purpose of his audit have been received from branches or offices of the cooperative society not visited by him;
(c) whether the report on the accounts of any branch office audited by a person other than the cooperative society’s auditor has been forwarded to him and how he has dealt with the same in preparing the auditor’s report;
(d) whether the cooperative society’s balance sheet and profit and loss account dealt with by the report are in agreement with the books of account and returns.
(15) Where any of the matters referred to in clauses (a) and (b) of sub-section (13) or in clauses (a), (b), (c) and (d) of sub-section (14) is answered in the negative or with a qualifying observation, the auditor’s report shall state the reason for the answer.”