Page 277 - CA Inter Audit PARAM

CA Ravi Taori
operative society. Explain stating also the persons who are not eligible for appointment as auditors of a
Multi-State co-operative society.
Answer ➢ Qualification of Auditors –
Section 72 of the Multi-State Co-operative Societies Act, 2002 states that a person who is a Chartered
Accountant within the meaning of the Chartered Accountants Act, 1949 can only be appointed as
auditor of multi-State co-operative society.

➢ Disqualification
However, the following persons are not eligible for appointment as auditors of a multi-State
cooperative society-
A body corporate.
A person who is a member.
An officer or employee of the multi-State co-operative society.
A person who is in the employment, or an officer or employee of the Multistate co-operative
society.

A person who is indebted to the Multi-State co-operative society or who has given any
guarantee or provided any security in
connection with the indebtedness of any third person to the Multi-State co-operative
society for an amount exceeding one thousand rupees.

If an auditor becomes subject, after his appointment, to any, of the disqualifications specified above,
he shall be deemed to have vacated his office as such.

QNO Powers and Duties of auditors- Old Course-- (M20R)
AOC.07 Bhaskar CNO - AOC.100
Explain the powers and duties of auditors under the Multi -State Co-operative Societies Act, 2002.
Answer ➢ Section 73 of the Multi-State Co-operative Societies Act, 2002 discusses the powers and
duties of auditors.

Powers of the auditor
According to this, every auditor of a Multi -State co-operative society shall have a right of
access at all times to the books accounts and vouchers of the Multi-State co-operative society,
whether kept at the head office of the Multi - State co-operative society or elsewhere, and shall
be entitled to require from the officers or other employees of the Multi- State co-operative
society such information and explanation as the auditor may think necessary for the
performance of his duties as an auditor.

Duties of the auditor
As per section 73(2), the auditor shall make following inquiries:
• Whether loans and advances made by the Multi -State co-operative society on the
basis of security have been properly secured and whether the terms on which they
have been made are not prejudicial to the interests of the Multi -State co-operative
society or its members,
• Whether transactions of the Multi-State co-operative society which are represented
merely by book entries are not prejudicial to the interests of the Multi-State co-
operative society,
• Whether personal expenses have been charged to revenue account, and
• Where it is Stated in the books and papers of the Multi-State co-operative society that
any shares have been allotted for cash, whether cash has actually, been received in
respect of such allotment, and if no cash has actually been so received, whether the
position as stated in the account books and the balance sheet as correct regular and not
misleading.

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