Projcet Audit

B.V.V.
SANGHA’S
S.R.KANTHI ARTS, COMMERCE& SCIENCE COLLEGE MUDHOL- 587313
DR. PRABHAKAR KORE CO-OP CREDIT SOCEITY
LTD., ANKALI.(MULTI STATE)
TAL : CHIKODI. DIST : BELGAUM.
E-mail : dr.pkcss.ankali@gamil.com website : www.dpkoresociety.com
DR.PRABHAKAR KORE CO-OP CREDIT SOCIETY LTD.

B.V.V.SANGHA’S
HISTORY.
Dr.Prabhakar Kore Co-op Credit Society Ltd,.Ankali (Multi-state) , keenly welcome

all of you to be a part of the Co-Operative for the corresponding development of together.
Dr.Prabhakar Kore Co-op Credit Society Ltd,.Ankali (Multi-state) was established in the year
of 29th September 1988 formerly as Ankali Urban Co-operative Credit Society ltd; Ankali,
Rajiv GhandiRoad,A/p-Ankali, Tal-Chikodi, Dist Belgaum. under the prestigious & dynamic,
personality- Dr.Prabhakar Kore he who is the Member of Parliament in Rajya Sabha, the
Chancellor of K.L.E University founded the Said Society initially with the formerly named as
Ankali Urban Co-operative Credit Society LTD;Ankali with 7 Board of members &
inaugurated by the divine blessings of Shri.SiddeshwarMahaswamiji of Bijapur
Dynanyogashram.
• Prabhakar Kore Co-op credit society ltd,.ankali (Multi-state) was established in

the year of 29thSeptember 1988 formerly as Ankali Urban Co-operative Credit
Society ltd ;Ankali, Rajiv Ghandi Road, A/p-Ankali, Tal-Chikodi, Dist
Belgaum. under the prestigious & dynamic, personality- Dr.Prabhakar Kore he
who is the Member of Parliament in Rajya Sabha, the Chancellor of K.L.E
University founded the Said Society initially with the formerly named as Ankali
Urban Co-operative Credit Society Nyt;Ankali with 7 Board of members are
Chairman Shri.Shripal S Kante and directors Shri.
AnnasahebShivalingappaPatil ,Shri.Sadanand Gangadhar
Chikali,Shri.Ganpatrao B Kumbar, Shri. Dattatraya R Kothiwale, Shri. Bandu
PeerappaPujari ,Shri.Annasaheb Dhanpal Shetty and Mahila Director- Smt.
Nalini Arjun Magdum.
• For overcome the economic level and also to provide the banking facilities for
the farmers and poor people for which the founder made bold venture to
inaugurate this institution by the divine blessings of
Shri.SiddeshwarMahaswamiji of Bijapur Dynanyogashram.
• Our Organisation stiffly started working on the path of Sahakar/co-operation on
which the basic deed is “STRONG & PURE SOCIETY” Not only to
cultivate habits of thrift amongst all classes, building to aid economic activity
through co-operation of all, shorn of distinction of caste and creed. It
endeavored and succeeded in striking a right balance between values and
innovative approach, personalized service and professional outlook and
commercial considerations and public concern.
• Our Organistion has branches for the service at Chandur, Dsf site, Kerur,
Diggewadi, Tilakwadi-Belgaum, College Road- Belgaum, Chikodi, Athani,
Gokak, Shivashakti sugars site-yadrav, Chinchali, Nippani, Harugeri,
Bailhongal, Examba, Sadalaga, M.K.Hubli,RNBangalore,HN Belgaum, Yadur,
Mahalingpur, Haveri, Galataga, Kagwad, Ainapur, Banahatti,VadagoanBgm,
Mudhol, Dharawad, Jamakhandi, KOrmangal, Davanagere, Ranebennur,
Sankeshwar, Terdal, Bagalakot, Shiraguppi, Kankanwadi, Nandikurali,
Hirekerur, Gangavathi, Konnur, Khanapur, Kittur, Kabbur, Darur, Hukkeri,
Savadatti And Mahantesh Nagar(Belgavi) under the local Body Committees of
branches respectively.
• And this Co-operative Sector with honrary of Karnataka State Souhard
Federation Co-operative Niyamit;Bangalore this was renamed the Ankali Urban

B.V.V.SANGHA’S
Co-operative Credit Society as Dr.Prabhakar Kore Credit Souhard

SahakariNiyamit; Ankali under the Karnataka Souhard Co-operative Act 1997
of section 5(3) with registered no : RSR/Sou/CO-Op/208/Reg/111/06-07 dtd
30/03/2007 And In 2023 Dr.Prabhakar Kore Credit Souhard SahakariNiyamit;
Ankali Renamed as Dr.Prabhakar Kore Co-op Credit Society Ltd,.Ankali
(Multi-state) under The Central Registrar of Cooperative Societies by owning
its building at Ankali ,Chandur, Kerur, Diggewadi, College Road And Nippani
branches .
• While at beginning of the Society, the Board of Members made 257 members
and collecting the deposits of Rs.1,71,059/- for functioning.
CURRENT FINANCIAL CONDITION.
• MEMBERS : No. of Members at the end of the year 2022-23 are 71,573.
• SHARE CAPITAL : At the end of the financial year 31-3-23 the share capital
of our society was 2,83,23,400.
• DEPOSITS : Financial year dated 31-3-2022 had deposits of Rs.1214,49,67,00

and Rs. 1262,95,05,000 at the end of financial year 31-03-2023. That will be
48,45,38,000 deposits will be higher.
• FUNDS : End of 31-03-2023 reserve fund, building fund, employee welfare
fund, education fund. Total deposits including NPA fund and other funds is ₹
65,10,75,000.
• LOANS ADVANCES : Member loan, Secondary Loan, Cane Harvesting and

Vehicles Re-Work Loan, Cash Bond Loan, Gold Exchange Loan, etc. as on 31-
03-2022 ₹ 820,09,56,000, as on 31-03-2023 the loan was ₹ 871, 36, 39,000 will
be that means ₹ 51,26,83,000 loan will be more.
• PROFIT : For the financial year 2021-22 ₹ 14,00,73,000 eve in the reporting
year 2022-23 net profit excluding non-performing assets(NPA) plus accrued
interest & other provisions at the end of the year stood at ₹17,10,00,000 net
profit which means ₹ 3,09,21,000 higher net profit .

B.V.V.SANGHA’S
FACILITIES PROVIDED.
 E- STAMPING FACILITIES.
Our society is providing e-stamping service in its branches through modern technology in
collaboration with Samyukta co-operative and distributed 70696 stamps during the reporting
year at a value of ₹ 1,15,41,557/- collected stamp duty.
 SERVICE OF ASSOCIATION THROUGH MODERN TECNOLOGY.
During the reporting year, the society has collected DD (At par cheque), RTGS, NEFT, service
and Third Party Check through modern technology. And we have done mobile recharge and
pan cards. And we have distributed Uttara(RTC) to the farmers. The total revenue collected
from all these sources is 8,61,000 and it is a matter of happiness that the revenue is being
generated from other sources.
 INSURANCE SERVICE.
Our society offers various types of insurance services, including Life insurance, General
insurance, and Health insurance, totalling ₹ 3,21,00,000 in addition to providing various types
of insurance services ₹ 21,02,600/- .
ESTD : 1988
Reg no. : MSCS/CR/1416/2023
ADD : Old Ragvendra talkies shah building, near new municipal council.
BRANCHES : 51.
FOUNDER : Dr. Prabhakar Basavapradhu Kore
BOARD OF
MEMBERS : 7.

B.V.V.SANGHA’S
BOARD OF DIRECTORS.
1. Shri. Mahantesh .L. Patil - President

2. Shri. Sidagowda .T. Magdum – Vice President
3. Smt. Dr. Preeti .K. Dodawad – Director
4. Shri. Malikarjun .G. Kore – Director
5. Shri. Annappasaheb .S. Sankeshwar– Director
6. Shri. Sukukumar .B. Chogale – Director
7. Shri . Basangowda .M. Asangi – Director
8. Shri. Pintu .S. Hirekurbar – Director
9. Shri. Amit .G. Jadav – Director
10. Shri. Praful .V. Shetty – Director
11. Shri. Balappa .D. Umarane – Director
12.Shri. Ashoka .S. Chogale - Director
13.Shri. Anil . R. Patil – Director
14.Smt. Shobha .A. Jakati – Director
15.Smt. Shailaja .S. Patil – Director
16.Smt. Parvati .N. Dharnayak – Director
17.Smt. Jayashree .P. Medar – Director
18.Shri. Shrikant .D. Umarane– Director
19.Shri. Vivekananda .D. Kamate– Director
20.Shri Devendra .C. Kore– Director

B.V.V.SANGHA’S
PROCEDURE OF THE INTERNAL CHECK:
Meaning: An internal check is a continuous process of the accounting system to check for
errors or fraud in bookkeeping operations for early detection and prevention. The internal
check is an arrangement of the duties of the staff members of the accounting functions in
such a way that another automatically checks the work performed by a person.
In the opinion of Spicer and Pegler, “A system of internal check is an arrangement of staff
duties, whereby no one person is allowed to carry through and to record every aspect of a
transaction so that without collusion between two or more persons, fraud is activated and at
the same time the possibilities of errors are reduced to the minimum”.
L.R. Dicksee defines an internal check as “an arrangement of book-keeping routine that
errors and frauds are likely to be prevented or discovered by the very operation of the book-
keeping itself.”
Internal check means a continuous internal audit carried on by the staff, using which other
staff members independently check each individual’s work.
Characteristics of internal check:
8 qualities make an internal check system more effective and efficient.
1. Division of Work
2. Provision of Check
3. Use of Devices
4. Self-balancing System
5. Job Rotation
6. Specialization
7. Control

B.V.V.SANGHA’S
Division of Work
No one should be allowed to have the right to perform the work from origin to end.
For example – a transaction of sale may have to be split into a display of article by staff, the
preparation of invoice by another, the receipt of cash against the invoice by a third clerk, the
delivery of article against the proof of receipted invoice by another clerk, checking of
outward movement of an article against delivery order by a clerk and so on.
In big business houses, such specialized tasks increase work speed and automatically
introduce internal checks.
Provision of Check
An organization should set up such provisions so that work can be checked by other
staff. An officer can check the work of one staff by transferring to the staff and again.
Use of Devices
In this modem world, various devices can perform various functions like time record
machines, wage determination machines, etc. An organization should use machines that help
to make the work of internal checks easier.
Self-balancing System
An organization can use self-balancing ledger accounts, which help to make the work
of internal checks easier. Its effectiveness depends on its management.
Job Rotation
No individual clerk should be allowed to occupy a particular area of operation for long.
Familiarity with and exclusiveness in a position offer a person greater flexibility to attempt
manipulation with the system.
Specialization
Every staff may not have such specialized knowledge to maintain accounts properly.
So, an organization should give training to increase their skills so that internal checks can be
made more effective.

B.V.V.SANGHA’S
Control
There is more chance of fraud where there is direct contact between consumers or the
public. So, a manager can keep an eye on those works so that the internal check system can be
more effective.
Authority Level
There must be clear-cut authority levels according to sanctions for various

transactions. Commensurate to the authority vested, responsibility must be extracted. The
existence of authority levels results in a review of the operations of subordinates.
Objectives of Internal Check
There are several objectives of the internal check. They are given below:
• To minimize the possibility of error, fraud, and irregularity.
• To prevent the misappropriation of cash and goods.
• To allocate duties and responsibilities to every clerk in the organization.
• To ensure an accurate recording of all business transactions.
• To enhance the efficiency of the clerk in the organization.
• To exercise moral influence over the staff member.
• To prepare a final account with ease and efficiency.
Principles of Internal Check
1. An internal check is based on some specific principles. Without which, an internal check is
of no use. These principles are given below:
2. The business staff should allocate the process according to the duties, responsibilities, and
rights. There is no room for interference.
3. No single person should have independent control over the all-important aspects of the
business.

B.V.V.SANGHA’S
4. The duties among the business staff should be changed from time to time so that no staff
should be engaged in a particular job for a long time.
5. Every staff member should be encouraged to go on leave at least once a year. This will
help in detecting concealed fraud.
Advantages of internal check:
• Moral Influence on Employees
• Determination of Employees’ Liability
• Less Possibility of Frauds
• Increase in Efficiency
• Auditing Made Easy
• Final Accounts Can Be Prepared
• Correct and Complete Records of all the Transactions
• Detection of Dishonesty or Irregularity
• Test Checking Possible
Moral Influence on Employees
The system of internal checks puts a morale check on staff members and enables them
to learn honesty, hard work, and straightforwardness.
Determination of Employee’s Liability
The system of the internal check determines the responsibilities of employees. The
staff member may be held responsible for any irregularity carried on by him.
Less Possibility of Frauds
There is less possibility of fraud under the system of the internal check because errors
and frauds can be detected early.
Increase in Efficiency

B.V.V.SANGHA’S
The internal checks ensure greater efficiency and speed because the arrangement of
internal checks is based on a division of labour.
Auditing Made Easy
The internal checks system facilitates auditors’ work to a great extent by enabling
them to rely on test checking.
Final Accounts Can Be Prepared
In an internal check system, the ‘Profit and Loss Account’ and Balance Sheet is
prepared without any loss of time.
Correct and Complete Records of all the Transactions
The system of an internal check may also result in correct and complete records of all
the transactions on each balancing of the books of accounts.
Detection of Dishonesty or Irregularity
Any dishonesty or irregularity in the concern by the staff members can be detected
before they assume any complication.
Test Checking Possible
Suppose the auditor finds the system of internal cheek satisfactory. Then by
considering defects or weak points, he can take the help of test checking.
Disadvantages of Internal Check:
• Expensive
• Slackness in the Work
• Not Suitable for Small Concerns
• Grouping among Employees
• Expensive
• The system of Internal checks is more expensive and time-consuming.
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B.V.V.SANGHA’S
Slackness in the Work
The auditor may show slackness at work. He may rely on the system of internal check
blindfolds, which may adversely affect the quality of audit work. This is also a serious defect
of the system of internal checks.
Not Suitable for Small Concerns
The system of internal checks is not suitable for small concerns as it may be
uneconomical in small concerns.
Grouping among Employees
If the concerned employees join hands, they may keep the employer in the dark and
may cause many irregularities defying any detection thereof. This grouping amongst the
employees may not be healthy.
Despite these four disadvantages, performing internal checks is crucial for all types of
organizations. Internal auditors are responsible for conducting internal checks and audits. With
a clear understanding of internal check; for more learning use our complete guideline on
fundamentals of management, auditing and strategic management.
Objectives Of Internal Check
Following are the main objectives of Internal Check –
• To protect business from carelessness, inefficiency and fraud.
• To ensure and produce adequate and reliable accounting information.
• To keep moral pressure over staff.
• To minimize the chances of errors and frauds and to detect them easily on early
stage if it is committed.
• To divide the work in such a way that no business transaction should be left unrecorded.
• To fix the responsibility of every clerk according to the division of work.
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B.V.V.SANGHA’S
Internal Check as regards certain transactions
A. Cash Receipts.
1. The correspondence like inward mails and remittances should be handled by some
responsible official.
2. There should be a separate clerk, known as cashier, to deal with cash receipts.
3. The cashier should not have access to the books of account.
4. Pre-numbered and pre-printed receipt book should be used for all cash collections.
5. All cash receipts should be deposited in the bank on daily basis through pay-in slips.
B. Cash Sales: Sales at the Counter
• The salesman, authorized to sell the goods at the counter, should be specifically named. A
specific number should be allocated to every salesman.
• Cash memos shall be printed in numerical sequence.
• The salesman sells goods to the customer and prepares four copies of cash memo, three of
them handed over to customer and one is retained by him.
• The customer will carry all the three copies to the cashier. After collecting the cash, the
cashier will return two copies to the customer, duly stamp marked as cash paid.
• Goods are handed over to the customer by gatekeeper and one copy of cash memo is
retained by the gatekeeper and the other one will remain with the customer.
• At the end of the day, salesman – cashier – gatekeeper prepares the summaries of cash,
sales separately and then they reconcile it, for any difference.
• The amount received from the cash sales should be deposited daily in the bank.
C. Cash Sales: Sales by Travelling Salesman/Agents
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B.V.V.SANGHA’S
In some of the organizations, travelling salesman is appointed for direct sales promotion and
collection. In such a case, the internal check system should be:
• The salesman should be authorized to issue money receipts.
• They should deposit the entire cash collection daily to the cashier or to the bank account
of the company.
• The salesman should submit the daily report of sales and collection.
• The salesman should not keep any cash with him.
• No cash collection should remain outstanding.
• If possible, the salesman should be transferred from one area to another to avoid the
frauds.
Credit Sales
• The sales department receives a purchase order from the customer. On receipt of the
order, it should be numbered and preserved in the order received book.
• Before the sales orders are processed, credit department should determine the credit
worthiness of the customers.
• The dispatch department should be given a copy of order.
• The storekeeper who maintains custody over the inventory should issues goods to the
dispatch department.
• The statement of goods prepared by dispatch department should be checked with
customers’ order and then invoice should be prepared. The invoices are checked by a
• On dispatch of goods, outward note is prepared. Entries are made in the dispatch
register and sales book.
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B.V.V.SANGHA’S
Purchases
• The department who is in need of material, should fill in the requisition slip duly signed
and shall send it to purchase department.
• The purchase department should make an enquiry about the terms and conditions of
purchases from different suppliers on the basis of tenders and quotations.
• The purchase department should place the purchase order. Four copies of purchase order
are prepared. One is sent to the vendor, second to the stores department, third to the
accounting department and fourth is kept by the purchase department with itself.
• On receipt of goods, they are properly inspected and entries are made in the goods inward
register.
• The purchase department should check the invoice and send the same to the accounting
department for payment.
• For the goods returned to the supplier entries should be made in the Purchase Return Book
and a debit note is issued to the supplier.
Cash Purchases
The purchase order should be prepared on the basis of purchase requisition duly authorized
by a competent official.
(i) The terms and conditions of purchase should be decided on the basis of comparative tenders
and quotations.
(ii) The materials purchased should be verified as regards quantity and quality by the person
independent of purchase department and store department.
(iii) The purchase-invoice should be verified with purchase order and goods received note.
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B.V.V.SANGHA’S
AUDIT OF DR.PRABHAKAR KORE CO-OP CREDIT SOCEITY LTD.
Meaning: Is review of operations and records undertaken within a business by internal

staff or outside agency specially deputed for this purpose. This review may be periodic or
continuous. It is an important tool in the hands of management. It is a type of control which
functions by evaluating the effectiveness of other types of controls.
Applicability of Internal Audit.
As per the Companies Act 2013, following class of companies shall have to mandatorily
appoint internal auditor.
• Every Listed Company
• Every Unlisted public company if during the preceding financial year, it satisfies any of the
below mentioned conditions:
1. Turnover of rupees two hundred crore or more.
2. Paid up share capital of rupees fifty crore or more.
3. Outstanding loans or borrowings from banks or PFI exceeding rupees one hundred crore or
more at any point of time.
4. Outstanding deposits of rupees twenty five crore or more at any point of time.
Responsibilities of an Internal Auditor.
• Always enjoy an independent status and shall not involve in the performance of executive
function.
Analyse the risk and bring them in the notice of management.
• Analyse the operations of the entity and maintain an adequate system of internal control, also
provide safeguard. Against misappropriation of assets.
• Evaluate the policies of organization and made necessary changes on it, if required.
• Keep an eye on all important occurrences and events which may affect the business.
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B.V.V.SANGHA’S
• Shall not take operation decision on those matters later which may be internal audit.
Skills Possessed by an Internal Auditor.
• An internal auditor must possess an expertise necessary to evaluate the management control
system.
• An internal auditor must have a basic knowledge about the technology and commercial
practices followed by the entity. So, that he can evaluate the operational performance and non-
monetary, operational controls.
• An internal auditor must possess knowledge of commerce, laws, taxation, cost accounting,
economics, quantitative methods and ERP systems.
• He has an ability to deal with people and an understanding of management principles and
techniques.
• He should maintain the confidentiality of such information which he acquired during the
course of audit.
Report of Internal Auditor.
• The Internal Auditor shall issue their report on the basis of his best professional judgement,
after consultation with the auditee, in a reasonable period of time from the completion of audit.
Key elements of internal audit report are as follows:
• Conclusion of internal audit report should be on the basis of audit procedures performed
during the audit and the analysis of the audit evidence obtained by performing these procedures.
• If internal audit is performed as per Standards on Internal Audit then the auditor shall specify
the same in his report.
• Since the Standards on Auditing does not mandate the auditor to follow a particular format.
So, an auditor may frame his report by exercising professional judgement and may be
influenced by the preferences of the recipients.
• After fulfilment of all the compliance procedure Copies of draft and final internal audit reports
to should be maintained in a proper manner.
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B.V.V.SANGHA’S
Scope and Objectives.
• To review the internal control system.
• To review the custodianship and safeguarding of assets.
• To review the compliance with plans, policies, procedures and regulations.
• To review the relevance and reliability of information.
• To review the utilization of resources.
• To review the accomplishment of goals and objectives.
Importance
Internal Audit is not compulsory under any statute; so, usually, only the large-scale
organizations used to get internal audit done. However, these days the concept of internal audit
is gaining significance because of the following reasons :
1. According to Companies Audit Report Order, 2003, in case of specified companies, the
statutory auditor is required to report whether internal audit system of the company
commensurate with the size and nature of the business. Specified company means a company
whose paid up capital and reserves exceed ` 50 lakhs or whose average annual turnover for the
last three financial years preceding the current financial year exceed ` 5 crores.
2. Internal audit as per section 138 of the Companies Act, 2013 is mandatory for every listed
public company and other public companies with a paid up share capital of ` 50 crores or more.
The Act also makes internal audit mandatory for all companies including private companies
with an annual turnover of ` 200 crores or more, or outstanding loans or borrowings from banks
or public financial institutions exceeding ` 100 crore.
Appointment of Auditor
The appointment of an Auditor is done by Registrar of Co-operative Societies. The

Auditor conducts his audit on behalf of the Registrar. The Audit fees is paid by co-operative
society according to the statutory scale of fees prescribed by the Registrar in this regard
according to the category of society. The Auditor is required to submit his audit report directly
to the Registrar and one copy of the audit report is submitted to the concerned society.
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B.V.V.SANGHA’S
Rights of an Auditor
• As per Section 17, an Auditor can access all the books, accounts, documents and securities
of the society.
• He has to see that Balance-sheet of the society shows a true and fair view of a business
according to information and explanation given to him.
• Every officer of the society is bound to give all information regarding working and
transactions of the society.
Duties of An Auditor
• An Auditor needs to consider the following points to be able to perform his duties in an
efficient way –
• An Auditor should be well-versed with the Co-operative Society Act, 1912 and the bylaws of
the society.
• If there is any type of irregularities and improprieties found by an Auditor during his audit
regarding Co-operative Societies Act, 1912 and by-laws, he should immediately point out the
same.
• An Auditor should ascertain that how many shares are held by each member of the society;
for this, he should check the member ship registers.
• An Auditor should be well aware of power of officers regarding loan, investment, borrowings,
advancing of the funds.
• He should thoroughly check and vouch the cash book and bank book.
• An Auditor should check all the receipts and payments of the society according
to standard auditing practice.
• An Auditor should physically examine and verify the assets of a society.
• He should adopt different methods for different kind of societies.
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B.V.V.SANGHA’S
• Balance-sheet, profit and loss account and Auditor report should be according
to the proforma given by the Chief Auditor of the Co-operative Society of the
State.
• Accounts should be according to the Co-operative Society Act and also with the
provision of Income Tax Act.
SPECIALITIES OF DR.PRABHAKAR KORE CREDIT CO-OP SOCIETY

1. Providing the agriculture loan.
2. Providing the loans in the least rate of interest
3. Loans for animal husbandry.
4. Providing the fertilizers to the handicapped persons.
5. Death compensation.
6. Financial support to handicapped persons.
7. Employment opportunities for women.
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B.V.V.SANGHA’S
8. Pigmy loans.
9. Helps through the yashaswini cards.
10. Providing the financial support to the window women.
11. It helps to overcome the constraints of agricultural development.
12. Provides agricultural credits and funds where state and private sectors have not been able
to do very much.
13. Providing the agriculture loan.
14. To spread light of education among the children belong to destitute families.
15. Advocacy programme on social issues.
Features of DR.PRABHAKAR KORE CO-OP CREDIT SOCIETY LTD.:
• As it is voluntary association, the membership is also voluntary.
• It is compulsory for the co-operative society to get registration.
• It does not get affected by the entry or exit of it’s members.
• There is limited liability of the members of co-operative society
Benefits of Farmers:
• Ownership and democratic control
• Increased farm income
• Improved service
• Quality of supplies and products
• Assured sources of supplies
• Enhanced competition
• Expanded market’s
• Improved farm management
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B.V.V.SANGHA’S
Farmers who are efficiently organized can from a collection voice to advocate for their needs
and access services at more affordable prices that can help them increase yields, sales and
profits. producer organizations could achieve competitiveness for smallholder farmers.
Auditing process
4 stages as followed this society.
1. Planning
2. Field work
3. Audit report
4. Audit follow up
Planning: announcement letter, meeting, preliminary survey, internal control review, audit
programme.
Filed work: Transaction testing, Advice & Informal communication. Audit summary. Working
papers.
Audit report: Discussion, Formal draft, final report, client response, client comments,
Audit follow up: Follow -up review, Report, Audit annual report to the board.
Procedure of internal check of the DR. PRABHAKAR KORE CO-OP

CREDIT SOCEITY LTD. :
Internal check as such an arrangement of book keeping routine that errors &
frauds are likely to be prevented or discovered by the very operation of the book
keeping itself.
Objectives of internal check:
• To eliminate the acts of frauds & error.
• To fix up responsibility of each person.
• To prevent misappropriation of goods & cash.
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B.V.V.SANGHA’S
• To detect frauds & errors immediately.
• To exercise moral influence on the auditor.
• To expenditure to work of employees.
• To simplify the work of the auditor.
• To increase the efficiency of employees.
Cash Receipts:
1. The correspondence like inward mails and remittances should be handled by some
2. There should be a separate clerk, known as cashier, to deal with cash receipts.
3. The cashier should not have access to the books of account.
4. Pre-numbered and pre-printed receipt book should be used for all cash collections.
5. All cash receipts should be deposited in the bank on daily basis through pay-in slips.
6. Bank pay-in slips should not be prepared by the same person who is in charge of making
actual deposits in bank.
7. Counterfoils of receipts issued should be preserved.
8. Cancellation of spoiled receipts (not to be torn off).
9. Safe custody of unused receipts.
10. If some alteration is made in the receipt already issued, it should be properly initialled.
22

B.V.V.SANGHA’S
Cash sales: sales at the counter:

1. The salesman, authorized to sell the goods at the counter, should be specifically named. A
specific number should be allocated to every salesman.
2. Cash memos shall be printed in numerical sequence.
3. The salesman sells goods to the customer and prepares four copies of cash memo, three
of them handed over to customer and one is retained by him.
4. The customer will carry all the three copies to the cashier. After collecting the cash, the
cashier will return two copies to the customer, duly stamp marked as cash paid.
5. Goods are handed over to the customer by gatekeeper and one copy of cash memo is
retained by the gatekeeper and the other one will remain with the customer.
6. At the end of the day, salesman – cashier – gatekeeper prepares the summaries of cash,
sales separately and then they reconcile it, for any difference.
7. The amount received from the cash sales should be deposited daily in the bank.
Cash Sales: Sales by Travelling Salesman/Agents

In some of the organizations, travelling salesman is appointed for direct sales promotion
and collection. In such a case, the internal check system should be:
1. The salesman should be authorized to issue money receipts.
2. They should deposit the entire cash collection daily to the cashier or to the bank account
of the company.
3. The salesman should submit the daily report of sales and collection.
4. The salesman should not keep any cash with him.
5. No cash collection should remain outstanding.
6. If possible, the salesman should be transferred from one area to another to avoid the frauds.
Cash Payments.
1. The official responsible for making cash payments should have no connection with the
receipt of cash.
2. All payments, as far as possible, should be through cheques or NEFT/RTGS/IMPS.
23

B.V.V.SANGHA’S
3. The cheques should be signed by the authorized official only.

4. All payments exceeding some specified limit should be duly authorized.
5. Safe custody of unused cheques.
Payment of Wages and Salaries.

• To avoid incorrect time records or piecework records.
• To avoid the inclusion of dummy workers.
• To avoid the fraudulent manipulation of wage sheet.
• To avoid misappropriation of money, etc.
Proper Maintenance of Wage Records: The workers are paid wages either on the basis of
time spent by them or number of pieces produced by them. Therefore, there should be proper
time records or piecework records. The overtime records should also be kept in the
organization.
Cash Purchases.
• The purchase order should be prepared on the basis of purchase requisition duly authorized
by a competent official.
• The terms and conditions of purchase should be decided on the basis of comparative
tenders and quotations.
• The materials purchased should be verified as regards quantity and quality by the person
independent of purchase department and store department.
• The purchase-invoice should be verified with purchase order and goods received note.
Credit Sales.
• The sales department receives a purchase order from the customer. On receipt of the order,
it should be numbered and preserved in the order received book.
• Before the sales orders are processed, credit department should determine the credit
worthiness of the customers.
• The dispatch department should be given a copy of order.
• The storekeeper who maintains custody over the inventory should issues goods to the
dispatch department.
24

B.V.V.SANGHA’S
25

B.V.V.SANGHA’S
CONCLUSION:
Verifies that all accounts and transactions are posted correctly and that the trial balance
is in balance. Segregation of Duties: This internal check ensures that no single individual has
control over a transaction from start to finish.
A system through which the accounting procedures of an organisation are so laid out
that the accounts procedures are not under the absolute and independent control of any person.
Internal auditing is a professional activity involved in helping organizations to achieve their
stated objectives. It does this by utilizing a systematic methodology for analysing business
processes, procedures and activities with the goal of highlighting organizational problems and
recommending solutions.
If the controls are found to be effective, the auditor may rely on them to reduce the
extent of substantive testing. If the controls are found to be ineffective or have material
weaknesses, the auditor will need to plan and perform additional audit procedures to obtain
sufficient appropriate audit evidence.
Generally today a step forward in banks' perception of necessity in forming efficient
management system and internal control system has been made. But still there're many
questions remaining which are important to work out (like providing integration of banking
community and supervision authority approaches in different aspects).
All in all, control system is an important part of banking activity, maintaining its
reputation. And at any time any financial institution can't do without it.
The internal audit function of corporate governance provides objective and independent
assurance and consulting services designed to add value and improve the company's sustainable
performance in the areas of operations, risk management, internal controls, financial reporting,
and government processes.
Internal auditors are well trained and positioned to provide numerous assurance
services to their organization. The emerging trend toward more emphasis on MBL of
governance, economic, ethical, social, and environmental performance requires organizations
to provide assurance on a variety of their performance measures and achievements. SOX does
not directly address internal auditor responsibilities or internal audit function.
The internal audit function should have
(1) full and free access to the company's audit committee; (2) unrestricted access to the
company's records, documents, property, and personnel; and (3) authority to discuss initiatives,
policies, and procedures regarding risk assessment, internal controls, compliance, financial
reporting, and governance processes with management and other corporate governance
participant
26

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B.V.V.

DR. PRABHAKAR KORE CO-OP CREDIT SOCEITY

LTD., ANKALI.(MULTI STATE)

TAL : CHIKODI. DIST : BELGAUM.

E-mail : dr.pkcss.ankali@gamil.com website : www.dpkoresociety.com

DR.PRABHAKAR KORE CO-OP CREDIT SOCIETY LTD.

Dr.Prabhakar Kore Co-op Credit Society Ltd,.Ankali (Multi-state) , keenly welcome

• Prabhakar Kore Co-op credit society ltd,.ankali (Multi-state) was established in

DR.PRABHAKAR KORE CO-OP CREDIT SOCIETY LTD.

Co-operative Credit Society as Dr.Prabhakar Kore Credit Souhard

CURRENT FINANCIAL CONDITION.

• DEPOSITS : Financial year dated 31-3-2022 had deposits of Rs.1214,49,67,00

• LOANS ADVANCES : Member loan, Secondary Loan, Cane Harvesting and

DR.PRABHAKAR KORE CO-OP CREDIT SOCIETY LTD.

 SERVICE OF ASSOCIATION THROUGH MODERN TECNOLOGY.

Reg no. : MSCS/CR/1416/2023

FOUNDER : Dr. Prabhakar Basavapradhu Kore

DR.PRABHAKAR KORE CO-OP CREDIT SOCIETY LTD.

1. Shri. Mahantesh .L. Patil - President

DR.PRABHAKAR KORE CO-OP CREDIT SOCIETY LTD.

PROCEDURE OF THE INTERNAL CHECK:

Characteristics of internal check:

8 qualities make an internal check system more effective and efficient.

DR.PRABHAKAR KORE CO-OP CREDIT SOCIETY LTD.

DR.PRABHAKAR KORE CO-OP CREDIT SOCIETY LTD.

There must be clear-cut authority levels according to sanctions for various

Objectives of Internal Check

• To minimize the possibility of error, fraud, and irregularity.

• To prevent the misappropriation of cash and goods.

• To allocate duties and responsibilities to every clerk in the organization.

• To ensure an accurate recording of all business transactions.

• To enhance the efficiency of the clerk in the organization.

• To exercise moral influence over the staff member.

• To prepare a final account with ease and efficiency.

Principles of Internal Check

DR.PRABHAKAR KORE CO-OP CREDIT SOCIETY LTD.

Advantages of internal check:

• Moral Influence on Employees

• Determination of Employees’ Liability

• Less Possibility of Frauds

• Auditing Made Easy

• Final Accounts Can Be Prepared

• Correct and Complete Records of all the Transactions

• Detection of Dishonesty or Irregularity

• Test Checking Possible

Moral Influence on Employees

Determination of Employee’s Liability

Less Possibility of Frauds

DR.PRABHAKAR KORE CO-OP CREDIT SOCIETY LTD.

Auditing Made Easy

Final Accounts Can Be Prepared

Correct and Complete Records of all the Transactions

Detection of Dishonesty or Irregularity

Test Checking Possible

Disadvantages of Internal Check:

• Slackness in the Work

• Not Suitable for Small Concerns

• Grouping among Employees

• The system of Internal checks is more expensive and time-consuming.

DR.PRABHAKAR KORE CO-OP CREDIT SOCIETY LTD.

Slackness in the Work

Not Suitable for Small Concerns

Grouping among Employees

Objectives Of Internal Check