Everyone who belongs to the taxation stream will agree that this is the most wonderful time of the year! Yes, the holiday season. But we all will also agree with the fact that this time the holiday period is quite a short one due to the deadlines having been extended. Once the financial year ends the time for conducting statutory audits of various entities begins. So, what exactly does audit mean? Why are they conducted?
An audit is an independent examination of the financial statements of an entity, which is conducted by an external third party; who will form an opinion on the financial statements in an unbiased manner, to enhance the confidence of the users of the financial statements,which in turn will add value/worthto those statements.
Co-operative society is a voluntary association which works with aim of providing services to its members. It can be referred to as a form of business wherein people belonging to the same class join their hands to meet the common goals like common economic, social and cultural goals.
Audit of societies is conducted to vouch and verify the assets and liabilities along with checking the arithmetical accuracy of the books of accounts of the society. This is something which is looked into while conducting the audit of any entity. One of the main motives of conducting the audit of a society is to examine the Overdue Debts and Overdue Interest.
Any person who is a Chartered Accountant or a person who holds a government diploma in Co-operative Accounts or in Cooperation and Accountancy orany person who has already served as an auditor in the Co-operative Society of the State Government and his name is included in the Panel of Certified Auditors maintained by the Registrar and published in the official gazette at least once a year.
The auditor of the Society is appointed by Registrar of the Co-operatives Society. It can be said that the Auditor conducts the audit on behalf of the Registrar. And once the audit is completed he submits the audit report directly to the Registrar.
The Rights of the Auditor remain the same like the auditor of any other entity i.e. the auditor will have access to all the documents and books of accounts of the society, he/she will have to ensure that the accounts as a whole give true and fair view of the affairs of the societyand he/she is also bound to receive all the information regarding the working of the society.
The Duties of the Auditor are as follows:
Co-operative Societies auditis conducted as per Section 17 of the Co-operative Societies Act, 1912 which states as follows:
An Illustrative Format of Report of the Auditor of Co-operative Society
INDEPENDENT AUDITOR'S REPORT
The Chairman/Secretary/Chief Executive Officer
The __________ Cooperative Society Ltd,
Ref.:-Appointment Letter Reference No._______ Dated_______
Report on the Financial Statements as a Statutory Audit
1. We have audited the accompanying financial statements of The __________ Cooperative Society Ltd., which comprise the Balance Sheet as at 31st March 20XX and the Statement of Profit and Loss / Income & Expenditure for the year ended, and a summary of significant accounting policies and other explanatory information incorporated in these financial statements of the Society along withits Branches audited by us for the period 1st April 20XX to 31st March 20XX.
Management's Responsibility for the Financial Statements
2. Management is responsible for the preparation of these financial statements in accordance with Maharashtra Co-operative Societies Act, 1960 & Rules there under. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.
3. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the applicable Standards by The Institute of Chartered Accountants of India and under the MCS Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Society's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts together with the notes thereon give the information required as per the Maharashtra Co-operative Societies Act 1960 and the Maharashtra Co-operative Societies Rules 1961, and any other applicable Acts, and or circulars issued by the Registrar, in the manner so required for the society gives a true and fair view in conformity with the accounting principles generally accepted in India:
Report on Other Legal and Regulatory Matters
7. The Balance Sheet and theProfit and Loss Account have been drawn up in accordance with the provisions of the Maharashtra State Co-operative Act.
8. We report that:
a. We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the purpose of our audit and have found them to be satisfactory.
b. The transactions of the Society, which have come to our notice, have been within the powers of the Society.
c. The returns received from the offices and branches of the Society have been found adequatefor the purposes of our audit.
9. In our opinion, the Balance Sheet and Profit and Loss / Income & Expenditure Account comply with applicable Accounting Standards.
10. We further report that:
(Name of the Member Signing the Audit Report / Name of Auditor)
Firm Registration Number
Place of Signature:
Date of Report:
In the books of XXX Co-operative Society Ltd.
Profit & Loss Account for the year ended 31.03.20XX
|Last Year's Figures (in Rs.)||Expenditure||This Year's Figures (in Rs.)||Last Year's Figures (in Rs.)||Income||This Year's Figures (in Rs.)|
||1. Interest Received
|2.Bank Charges||2.Dividend Received on Shares|
|3. Salaries and Allowances to Staff||3.Commission|
|4.Contribution to Staff Provident Fund||4.Miscellaneous Income
|5.Salary and Allowances of Managing Director||5.Land Income and Expenditure Accounts|
|6.Attendence Fees and Travelling expenses of Directors and Committee Members|
|7.Travelling Expenses of Staff|
|8.Rent, Rates and Taxes|
|9.Postage, Telegram and Telephone charges|
|10.Printing and Stationery|
|12.(Contingencies) General Expenses|
|13.Bad Debts written off or Provision made for Bad Debts|
|14.Depreciation on Fixed Assets|
|15.Land Income and Expenditure Account|
|17.Net Profit carried to Balance Sheet|
Balance Sheet as on 31.03.20XX
|Last Year's Figures (in Rs.)||Liabilities||This Year's Figures (in Rs.)||Last Year's Figures (in Rs.)||Assets||This Year's Figures (in Rs.)|
|I. Share Capital
Shares of Rs..... each
Shares of Rs..... each
Less: Calls in arrears
Add: Calls in advance
|I. Cash and Bank Balances
|I-A. Subscription towards Shares||II. Investments
|II. Reserve Funds and Other Funds
|III. Staff Provident Fund||IV. Loans and Advances
|IV. Secured Loans
||V. Sundry Debtors
|V. Unsecured Loans
||VI. Current Assets
||VII. Fixed Assets
|VII. Current Liabilities and Provisions
||VIII. Miscellaneous Expenses and Losses
|VIII. Unpaid Dividends||IX. Other Items
|IX. Interest accrued due but not paid||X. Profit & Loss Account
Accumulated losses not written off from the reserve or nay other fund
|X. Other Liabilities (to be specified)||XI. Current Losses|
|XI. Profit & Loss Account
Profit for last year
Add: Current Profits
14th May, 2021
29th April, 2021
19th March, 2021
1st February, 2021
16th December, 2020
7th December, 2020
9th November, 2020
17th December, 2019
13th November, 2019
21st August, 2019
12th August, 2019
25th June, 2019