ADVANTAGES OF AUDIT :-

1. Apart from the detection of errors fraud, a regular audit would help to keep the books of accounts of
a business concern up-to-date.

2. The fact that audit is being done at regular intervals will act as a moral check and prevent fraud and
errors to a certain extent.

3. It also helps to provide an independent opinion to the members’ general body about the
management of their committee and the institution.

4. Audited accounts are usually relied up on for the purpose of assessing the income tax and sales tax
and also for disbursement of Government assistance.

5. An efficient audit is a safe guard to the creditors whose investments enable the institutions to conduct
its business.

6. The audit helps to ascertain the correct and true state of affairs of the business, which consequently
enables the institution to secure necessary finance on the certificate of the audited balance sheet.

DUTIES RESPONSIBILITIES AND POWERS OF CO-OPERATIVE AUDITOR

The main duties and responsibilities are the following:

The Audit of accounts of a society shall include:-

1. Examination of overdue debts, if any: The examination of overdue debts has a special importance in
case of Credit Cooperatives. Unless the overdue debts are examined thoroughly, no estimate of bad and
doubtful debts is possible. So the auditor must pay special attention to the examination of all overdue
debts.

2. Verification of the cash balance & securities:

3. Valuation of the assets and liabilities of the society: The valuation and verification of assets and
liabilities are the important duties of an auditor because unless the assets and liabilities are determined
correctly the real exchangeable value of assets of a cooperative society cannot be determined

4. Examination of all transactions of the society: The Cooperative Auditors has special responsibility to
assess the losses, if any sustained by a society due to negligence misconduct on the part of the office
bearers or an officer or member of a society whose action is detrimental to the interest of the society.

5. Examination of the statement of accounts prepared by the committee.: An Auditor may go through
beyond books and accounts and records, as he has to supplement information by calling for
explanations and clarifications.

6. The Auditor has also to see and comment whether prompt action is taken for recovery of current and
overdue loans and that no unauthorized renewal, etc. has taken place.

7. On certification of the accounts of a society the Auditors has to submit an audit memorandum to the
Registrar.
8. The Audit shall in all cases extend back to the last date covered previous audit and shall be carried
out up to the last date of the cooperative year immediately preceding the audit or such other date as
may be directed by the Registrar.

Thus, in addition to conducting audit according to the generally accepted principles, the Auditor has to
attend to the above matters.

POWERS OF AN AUDITOR

To discharges his duties an Auditor of a Cooperative Society has been vested with powers under the Act
and Rules. These are as under:-

1. He has the power to audit any cooperative institution allotted to him by general or special order in
writing made by the Registrar.

2. He has powers for examination of over dues, debts, if any, the verifications of the cash balance and
the securities, valuation of the assets and liabilities of the society, examination of all transactions of the
Society. The statement of accounts prepared by the committee and other particulars

3. He shall have free access to all the books and accounts, cash and other properties belonging to or in
the custody of the society and may summon any person in possession or responsible for custody of such
books and accounts, documents, papers of securities, cash or other properties to produce the same at
any place at the Head Quarters of the Society or any there under .

4. Every Officer or employee and every member and past members of the society shall have to furnish
such information in regard to transactions and working of the society as the auditor may require

5. The Auditors shall have the right to received all notices and every communication relating to annual
general meeting of the society and to attend such meeting and to be heard thereat, in respect of any
part of the business with which he is concerned as Auditor.

6. The Auditor, if specifically authorized by the Registrar of Coo. Societies, shall have power to summon
and enforce attendance of any person to give evidence and examine him on oath or affirmation or by
affidavit or to compel the production of any document or other material object, by the same means and
in the same manner as is provided in the case of a civil court under the code of civil procedure, 1908.

7. Any officer or member of a society who fails to furnish information/documents as per provision of this
act is punishable.

8. Any Officer, member, agent or servant of a society who fails to comply with the requirements of this
act is an offender under and punishable.

9. Auditors appointed under this Act is public servant within the meaning of Indian Penal Code 1860 as
per provision of this Act.