# Audit of Co-operative Society

## Audit Requirement

Accounts of a co-operative society must be audited at least once a year
Audit includes examination of:
Overdue debts
Valuation of Assets and Liabilities

## Rights of Registrar

The Registrar (or any person authorised by the Registrar) has the right to:

Access all books of the society
Call for any information from the society

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## Books of Accounts to be Maintained

Book / Register	Content
Receipt & Expenditure	All cash inflows and outflows
Sales & Purchase Register	Record of goods bought and sold
Daily Cash Sales Summary	Day-wise cash sales
Debtor Collection Records	Amounts receivable from members/debtors
Loan Disbursement Register	Details of loans issued
Recovery Register	Records of loan recovery

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## Appointment of Auditor

Aspect	Rule
Appointed by	Registrar
Reports to	Both — the Registrar AND the Society
Audit fee	As per category of society

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## Qualifications of Auditor

The auditor must be one of the following:

1. Chartered Accountant (CA)

2. Holder of a Government Diploma in Co-operative Accounts

3. Person with experience in co-operative department audits

> Note: Co-operative society audit does NOT require a CA exclusively — persons with government diploma or relevant experience also qualify.

Worked example

### Example 1

Scenario: The Registrar of Co-operative Societies asks you to audit the accounts of a primary agricultural credit society. What are the minimum requirements you must cover in the audit?

Answer: The audit must cover at minimum:

1. Examination of overdue debts — identify loans not repaid on time

2. Valuation of Assets and Liabilities — verify that the balance sheet reflects true and fair values

3. Verification of all prescribed books of accounts — receipts & expenditure, sales & purchase, daily cash, debtor records, loan disbursement and recovery registers

4. Reporting findings to both the Registrar and the Society

### Example 2

Scenario: An auditor who is not a Chartered Accountant but holds a Government Diploma in Co-operative Accounts applies to audit a co-operative society. Is this person eligible?

Answer: Yes, the person is eligible. The law does not restrict co-operative society audits exclusively to Chartered Accountants. A person holding a Government Diploma in Co-operative Accounts, or having experience in co-operative department audits, is also a qualified auditor for this purpose. The appointment is made by the Registrar.

⚠️ Common exam mistakes

Assuming only a Chartered Accountant can audit a co-operative society — persons with Government Diploma in Co-operative Accounts or relevant departmental experience also qualify
Thinking the auditor reports only to the society — the auditor must report to BOTH the Registrar AND the society
Overlooking that audit must include examination of overdue debts and valuation of assets and liabilities, not just a review of income and expenditure
Confusing appointment authority — the auditor of a co-operative society is appointed by the REGISTRAR, not by the members or management committee
Forgetting that audit must happen at least once a year — unlike companies where the frequency is also annual but is framed differently in law

Reference: — Co-operative Societies Act (State/Central)

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