(1) It shall be the duty of every co-operative society to get its accounts audited every year under the provisions of the Act.
1[(2) The Registrar shall prepare, approve and notify a panel of eligible auditors and auditing firms as per the provisions of sub-section
(4) and (5) of Section 54, from time to time, for such period as he may specify.
(3) The panel to be prepared under sub-rule (2) shall contain the following three parts namely:- 1 Substituted by G.S.R. 53 dated 10.7.2017, published in Raj. Gazette E.O. part 4 (x)(I) dated
10.7.2017, come into force at once.
2 Substituted by Notification No. F. 12(1) Coop/2011 dated 14.9.2011, pub. in Raj. Gazette E.O. part 4
(x)(I) dated 19.9.2011 with immediate effect.
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(i) Part-A, containing the names of auditors as mentioned in sub-clause (i) of clause (a) of sub-section (5) of Section 54,
(ii) Part-B, containing the names of auditing firms as mentioned in clause (b) of sub-section (5) of Section 54, and
(iii) Part-C, which shall contain a pool of the eligible departmental auditors as per the norms decided by the Registrar, from time to time and which can also be classified and categorized by the Registrar in a manner decided by him, from time to time.
(4) Every society shall appoint an auditor or auditing firm for audit of its accounts for each financial year latest by the end of May following that financial year or up to such time as may be fixed by the Registrar, as per the procedure mentioned in this rule and intimate the Registrar with such appointment. If the society opts for appointment of a departmental auditor, the necessary requisition shall be submitted before the Registrar latest by the end of May following that financial year or upto such time as may be fixed by the Registrar and the Registrar shall, on receipt of such requisition, appoint auditor(s) to audit the accounts of that society from Part-C of the panel specified in sub-rule (3).
(5) The decision regarding appointment of an auditor or auditing firm or requisition to appoint departmental auditors in the society shall be taken by the committee of the society and the decision shall be implemented by the Chief Executive Officer or a person working in place of the Chief Executive Officer as per the bye-laws of the society:
Provided that no such person or an auditing firm having such person as one of the partners of the firm, shall be appointed to audit the accounts of the society, who, either himself or one of his family 101 members, is associated with the society either as a member of the committee of the society or as an employee of the society.
(6) Whereas a society opting to appoint an auditor from Part-A or an auditing firm from Part-B of the panel shall make such appointment directly in the name of the auditor or the auditing firm concerned, as the case may be, under intimation to the Registrar. In case a society opts for appointment of an auditor from Part-C of the panel, it shall not issue any appointment letter directly in the name of a particular person, but shall always address its requisition to the Registrar or an officer exercising the powers of the Registrar for this purpose, who shall appoint any one of the auditor(s) from the aforesaid Part-C of the panel of departmental auditors to audit the accounts of the society.
(7) Where a society fails to intimate the Registrar with the appointment of auditor or auditing firm or to send a requisition to the Registrar for appointing auditors in the society to audit its accounts within the time stipulated therefor in sub-rule (4), the Registrar shall appoint an auditor(s) or auditing firm to audit its accounts from the panel of auditors or auditing firms prepared under sub-rule (2) and on such appointment of auditor(s) or auditing firm by the Registrar, any appointment made or claimed to have been made by the society shall be considered void and the society shall be bound to get its accounts audited by the auditor(s) or auditing firm appointed by the Registrar.
(8) Notwithstanding anything contained in sub-rule (4) to (7), the Registrar may, by an order, appoint an auditor(s) or auditing firm(s) to cause accounts of a society or a class of societies to be audited for a particular period, which shall be binding on the society or the class of societies, as the case may be.
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(9) No auditor or auditing firm shall be appointed to audit accounts of a society continuously for more than two years in continuation.]
1[(10)] The audit under Section 54 shall in all cases extend back to the last date of the previous audit and shall be carried out up to the last date of the co-operative year immediately preceding the audit or where the Registrar so directs in the case of any particular society or class of societies, such other date as may be specified by the Registrar.
1[(11)] The Registrar may, from time to time specify the form or forms in which the statements or accounts and information shall be prepared for audit by the society.
1[(12)] The auditor shall submit an audit memorandum to the society and to the Registrar in the form specified by the Registrar, on the accounts examined by him and on the balance sheet and profit and loss account as on the date and for the period up to which the accounts have been audited and 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 all the information required by the Act in the manner so required and give true and fair view.
(i) in the case of the balance sheet, of the state of society's affairs as at the end of the financial year or any other subsequent date up to which the accounts are made up and examined by him, and 1 Re-numbered by G.S.R. 53 dated 10.7.2017, published in Raj. Gazette E.O. part 4 (x)(I) dated
10.7.2017, come into force at once.
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(ii) in the case of profit and loss account, of the profit or loss, for the co-operative year, or the period covered by the audit, as the case may be:
Provided that in case of a short term co-operative structure society, the auditor shall also endorse a copy of the audit report to the Reserve Bank of India and the National Bank along with the Registrar.
1[(13)] The audit memorandum shall state, -
(i) whether the auditor had obtained all the information and explanations, which to the best of his knowledge and belief, were necessary for the purpose of his audit;
(ii) whether in his opinion proper books of accounts, as required by the Act, these rules and the bye-laws of the society have been kept by the society so far as it appears from the examination of these books; and
(iii) whether the balance sheet and profit and loss account examined by him are in agreement with the books of accounts and returns of the society.
1[(14)] Where any of the matters referred to in 2[sub-rule (13)] are answered in the negative or with a qualification, the audit memorandum all specify the reasons for the answer.
1[(15)] The audit memorandum shall also contain schedules with full particulars of:- 1 Re-numbered by G.S.R. 53 dated 10.7.2017, published in Raj. Gazette E.O. part 4 (x)(I) dated
10.7.2017, come into force at once.
2 Substituted by G.S.R. 53 dated 10.7.2017, published in Raj. Gazette E.O. part 4 (x)(I) dated
10.7.2017, come into force at once.
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(i) all transactions which appear to be contrary to the provisions of the Act, the rules or the bye-laws of the society;
(ii) all sums which ought to have been but have not been brought into account by the society;
(iii) any material impropriety or irregularity in the expenditure or in the realization of moneys due to the society;
(iv) any money or property belonging to the society which appears to the auditor to be bad or doubtful debt; and
(v) any other matters specified by the Registrar in this behalf.
1[(16)] The summary of audit memorandum as prepared by auditor shall be read out in the general meeting. The audit memorandum together with its accompaniments shall be open to inspection by any member of the society. The Registrar may however, direct that any portion of the audit memorandum, which appears to him to be of objectionable nature or not justified by facts shall be expunged and the portion so expunged shall not form part of the audit memorandum.
1[(17)] Where the Registrar is satisfied that an audit memorandum submitted by the auditor does not contain the necessary facts and particulars which are essential for presenting a true and fair picture of society's state of affairs, he may issue directions to the auditor to include the necessary facts in that regard and such directions shall be binding on the society as well as on the auditor.
1[(18)] On completion of his statutory audit, the auditor shall award an audit classification to the society whose accounts he has audited in 1 Re-numbered by G.S.R. 53 dated 10.7.2017, published in Raj. Gazette E.O. part 4 (x)(I) dated
10.7.2017, come into force at once.
105 accordance with the instructions issued by the Registrar from time to time. The Registrar may if he thinks necessary, amend the audit classification for reasons to be recorded in writing.
2[(19) If it comes to the knowledge of the Registrar that, prima facie, some financial irregularity has occurred in a society, the Registrar may get a special audit of the society conducted for the period during which such irregularity is believed to have taken place. The Registrar may, for conducting the special audit, appoint auditors requiring them to conduct audit for the period mentioned in his order keeping in view such issues as may be specifically mentioned in the order. Such special audit shall have the same effect as of a regular statutory audit.]
2 Inserted by G.S.R. 53 dated 10.7.2017, published in Raj. Gazette E.O. part 4(x)(I) dated 10.7.2017, come into force at once.
106 1[(20)] Where a request is received from the Reserve Bank of India to conduct special audit in the Apex Co-operative Bank or a Central Cooperative Bank on the issues and for the period mentioned in such request, the Registrar shall order to appoint auditor(s) to conduct such special audit as required by the Reserve Bank of India and the report of such special audit shall be conveyed to the Reserve Bank of India as well as 3[to the concerned Bank and the Registrar]. The report shall have the same effect as of a regular statutory audit.]
1 Re-numbered by G.S.R. 53 dated 10.7.2017, published in Raj. Gazette E.O. part 4 (x)(I) dated
10.7.2017, come into force at once.
3 Substituted by G.S.R. 53 dated 10.7.2017, published in Raj. Gazette E.O. part 4(x)(I) dated 10.7.2017, come into force at once.
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