Deepak Sharma, Jharkhand
I am a practicing CA from Jharkhand. I have gone through the 97th Constitutional amendment more specifically about the accounts and Audit. The freedom has been given to Co-op to appoint auditor in their general body meeting. In the amendment in article 243ZM the word Audit Firm has been used.
In our state except for a few special type of co-op. societies all other co-op. societies are being audited by the co-op. departmental auditor.
Kindly enlighten me about the amendment in the following points: -
1) Whether the audit is to be done by CA’s (CA or firm of CA) or by the departmental auditor ?
2) If the departmental auditor can also be appointed as statutory auditor, does it be appointed in the general body or the RCS will impose any auditor for any specific society ?
3) If the departmental auditor is appointed in the general body meeting and if he is being transferred to other district by RCS before the commencement of audit then do the general body meeting have to be called again to appoint some other departmental auditor ?
4) Whether only CA or CA firm can be appointed to do the statutory audit in Co-op. ?
5) If so, do the RCS prepare panel of CA / CA Firm every year or once in three year ?
6) Who will fix the remuneration for audit? Is it the RCS or the general body ?
7) What is the practice of appointment of auditor in Co-op. at Gujrat and other states prior to amendment and supposed to be changed after amendment ?
Sir, kindly provide the solution to the queries arisen in my mind while reading the amendment.
I shall be grateful to you.
Deepak Sharma, Jharkhand
I C Naik:
Good question. Answer follows
1. This issue is very much a part of the Union Government’s agenda of ensuring that “the co-operative societies in the country function in a democratic, professional, autonomous manner” Co-operative Society laws in some States provide for the audit of a Co-operative Society by members of Institute of Chartered Accounts of India, who are in practice. This auditor is appointed in general meeting. Some States provide for such appointment of persons selected from amongst the empanelled members of the Society Auditors.
2. Clause 3 of New Article 243ZM (as inserted in the Constitution of India under Constitution 97thAmendment Act) are meant to provide for appointment of auditors by the Members of Co-operative Societies assembled in a duly convened Annual General Meeting. This provision will uniformly apply to all Co-operative Societies (after 15-02-2013) in the country, even if a contrary provision exists in the State Law.
3. The States are obliged to prescribe qualification and experience of a person or an auditing firm should possess. A panel of such persons who are so eligible must be constituted by each State. Panel members are not necessarily only those who belong to the Chartered Accountant fraternity.
4. An uniform the time limit of six months for completing the audit has also been laid down under Clause 4 of this New Article.
5. Section 33 of Jharkhand Co-operative Societies Act, 2008 empowers / obliges the Registrar to appoint the auditor and to get the accounts audited with in a period of 75 days after the close of the year of every Co-operative Society. This power/duty of the Registrar and limitation of time of 75 days get superseded as afore said.