69. Procedure for appointment of auditors and for conducting audit
(1) The audit of accounts of societies shall be conducted by Departmental Auditors or by certified auditors appointed by the Registrar from time to time on such terms and conditions as he deems fit :
Provided that any society or class of societies notified by the Registrar may get their accounts audited by an auditor selected from the panel of certified auditors maintained by the Registrar and published by him in the Official Gazette.
Explanation 1: — For the purposes of this Chapter, audit shall include annual or periodical audit, continuous or concurrent audit and test or super audit and reaudit.
Explanation 2: — For purposes of this rule, "a certified auditor" includes —
(a) a Chartered Accountant within the meaning of the Chartered Accountants Act, 1949;
(b) a person who holds a Government Diploma in co-operative accounts or a Government Diploma in co-operation and accountancy; or
(c) a person who has served as an auditor in the Co-operative Department of the State Government, and whose name has been included by the Registrar in the panel of certified auditors maintained and published by him in the Official Gazette at least once every three years.
(2) The audit under Section 84 shall in all cases extend back to the last date of the previous audit and shall be carried out upto the last date of the co-operative year immediately preceding the audit or where the Registrar so directs in the case of any particular society or class of societies, such other date as may be specified by the Registrar.
(3) The auditor shall submit an audit memorandum to the society and to the Registrar in the form specified by the Registrar, on the accounts examined by him and on the balance sheet and profit and loss account as on the date and for the period up to which the accounts have been audited, and shall state whether in his opinion and to the best of his information and according to the explanation given to him, the said accounts give all the information required by the Act in the manner so required and give true and fair view;—
(i) in the case of the balance sheet, of the state of societys affairs as at the end of the financial year or any other subsequent date up to which the accounts are made up and examined by him, and
(ii) in the case of the profit and loss account, of the profit or loss for the financial year or the period covered by the audit, as the case may be.
(4) The audit memorandum shall state;-
(i) whether the auditor had obtained all the information and explanations which to the best of his knowledge and belief were necessary for the purpose of his audit;
(ii) whether in his opinion proper books of accounts, as required by the Act, these rules and the by-laws of the society have been kept by the society so far as it appears from the examination of these books; and
(iii) whether the balance sheet and profit and loss account examined by him are in agreement with the books of accounts and returns of the society.
(5) Where any of the matters referred to in sub-rule (4) are answered in the negative or with a qualification, the audit memorandum shall specify the reasons for the answer.
(6) The audit memorandum shall also contain schedules with full particulars of;—
(i) all transactions which appear to be contrary to the provisions of the Act, the rules or the by-laws of the society;
(ii) all sums which ought to have been but have not been brought into account by the society;
(III) any material impropriety or irregularity in the expenditure or in the realisation of moneys due to the society;
(iv) any money or property belonging to the society which appear to the auditor to be bad or doubtful debt; and
(v) any other matters specified by the Registrar in this behalf.
(7) The summary of audit memorandum as prepared by auditor shall be read out in a general meeting. The audit memorandum together with its accompaniments shall be open to inspection by any member of the society. The Registrar may however direct that any portion of the audit memorandum which appears to him to be of objectionable nature or not justified by facts shall be expunged and the portion so expunged shall not form part of the audit memorandum.
(8) The Registrar may from time to time specify the form or forms in which the statements of accounts and information shall be prepared for audit by the society.
(9) On completion of his statutory audit, the auditor shall award an audit classification letter to the society whose accounts he has audited in accordance with the instructions issued by the Registrar from time to time. The list of societies to be published under sub-section (3) of Section 12 shall also specify the audit class of the society.