## Special Report to the Registrar (Co-operative Society Audit)

### When Does a Special Report Arise?

During the course of audit, if the auditor notices serious irregularities in the working of a co-operative society, he may (in addition to the regular audit report) submit a special report to the Registrar drawing specific attention to those points.

The Registrar, on receiving such a report, may take necessary action against the society.

### Situations Warranting a Special Report

#	Situation
1	Personal profiteering by members of the managing committee in society transactions, detrimental to the society's interest
2	Detection of fraud relating to expenses, purchases, property, or stores
3	Specific instances of mis-management; decisions against co-operative principles
4	(Urban co-operative banks) Disproportionate advances to vested interest groups (relatives of management); deliberate negligence in recovery; reckless lending without adequate security or credit-worthiness assessment

### Key Distinction

The regular audit report is issued to the members/society.
The special report is a separate communication directly to the Registrar and is triggered only when serious irregularities are found — it is not a routine report.

Worked example

### Example 1

MTP 3 Scenario: You are appointed auditor of a co-operative society and notice serious irregularities during audit. Enumerate special matters for reporting to the Registrar.

Answer approach: The special report to the Registrar may cover: (i) Personal profiteering by managing committee members detrimental to the society; (ii) Fraud detected in expenses, purchases, property or stores; (iii) Specific mis-management instances and decisions against co-operative principles; (iv) For urban co-operative banks — disproportionate advances to management relatives, negligent recovery, and reckless lending without security or credit-worthiness checks.

⚠️ Common exam mistakes

Confusing the special report with the regular audit report — they are separate documents with different recipients
Treating the special report as mandatory in every audit — it is triggered only when serious irregularities are detected
Forgetting that the Registrar (not the society management) is the recipient of the special report
Missing the urban co-operative bank specific situation (disproportionate advances) in exam answers

Reference:

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Co-operative Society Audit – Special Report to Registrar

Worked example

⚠️ Common exam mistakes