The trade and business of a co-operative society is carried out with the capital of the members including the borrowed capital, but members/shareholders do not have much day-to-day control over the transactions, business conducted by the society during the financial year. Whether the business has been transacted in compliance/accordance with rules, prudential practices, statutes , instructions of the NABARD/R.B.I./State R.C.S., for this purpose the accounts of every society are audited at least once in each co-operative year by the Registrar or any person authorized by him as provided for under section 61,62, and 63 ( read with Rules 83,84,85).

Audit of the books of accounts of a co-operative society has mainly 3 objectives:-

  1. To verify the authenticity of the accounts, statements prepared by the officers/Committee of the society in order that they depict true financial position.
  2. To detect discrepancies and get removed the same.
  3. To detect frauds, if any.

The audit is done as per the annual audit programme/monthly allotments. The audit report is required to be submitted within 10 days of the completion of the audit .

The audit is carried out at the headquarter of the society and carrying of books by the auditors is not allowed. 4 copies of audit notes are prepared in case of state partnered societies and they are audited on priority. The audit report is explained to the managing committees after completion of audit. In case Annual General Meeting coincides with completion of audit, the audit note is explained to the general meeting as well.

Note: In exercising the functions under the Act, the Registrar, the arbitrator or any other person deciding the dispute or person entitled to audit, have all the powers of Civil Court as provided for under section 71 of the H.P. Co-operative Societies Act, 1968

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