Group 16: Cooperative Society Audit

Correct answer A: Identify the actual governing Act, rules, jurisdiction and operative bye-laws.

Module 13.1 distinguishes jurisdictions; State and MSCS regimes cannot be interchanged solely by name.

Correct answer B: The MSCS auditor must be a chartered accountant, with other eligibility conditions checked.

Section 72(1) is the MSCS qualification rule; do not transplant a State qualification example.

Correct answer C: Panel eligibility is required; AGM selection alone does not remove it.

The 2023 proviso adds Central Registrar-approved panel appointment; actual current category and eligibility matter.

Correct answer A: The society in general meeting may appoint the first auditor.

Section 70(6) provides the general-meeting fallback, not a secretary-only private note.

Correct answer A: Other-reason change during the three-year period requires prior CRCS approval.

The 1 Julycorrigendum inserts conditional three-year continuity and distinguishes eligibility/panel failure from other reasons.

Correct answer B: The relevant statutory panel and separate eligibility requirements for that appointment.

The 30 April 2026 order distinguishes bank statutory, non-bank statutory and all-MSCS concurrent categories.

Correct answer D: Selection from the entire State where the head office is located, subject to other conditions.

Order 2(iii) relaxes district to the whole relevant State; do not broaden to every State automatically.

Correct answer A: Treating panel inclusion as immunity from the order relationship restrictions.

Order 2(v) adds firm/person/relative relationship conditions alongside section 72; list presence is not the full test.

Correct answer A: The statutory disqualification arises and the office is deemed vacated under 72(4).

Section 72(2)(d)/(4) covers the supplied debt above Rs 1000 and subsequent disqualification; current order adds broader loan/conflict checks.

Correct answer B: The board fills the vacancy from the panel from which that auditor was appointed.

Amended 70(7)(a) expressly covers resignation/death; check qualification/current directions too.

Correct answer C: Section 73(1) covers books/accounts/vouchers at head office or elsewhere.

The source grants mandate-linked society records access and needed officer/employee explanations; it is not unrelated unlimited retrieval.

Correct answer A: Whether book-entry transactions are prejudicial, supported by substance rather than a balanced journal alone.

Section 73(2)(b) addresses transactions represented merely by book entries; test actual substance and prejudice.

Correct answer B: Verify actual receipt and truthful account description; the unsupported cash difference is Rs 1.5 lakh.

Section 73(2)(d) requires actual cash receipt/correct regular non-misleading position;8-6.5=1.5, not proof of loss.

Correct answer C: Whether personal expenses have been charged to revenue account.

Section 73(2)(c) addresses personal expenses; inspect evidence and correct treatment, not the relabel alone.

Correct answer C: Forwarding of the branch report and how it was dealt with in preparing the auditor report.

Section 73(4)(c) expressly calls for that reporting; supported evidence is needed.

Correct answer A: State the reason for the negative or qualified answer.

Section 73(5) requires reasons for the stated required matters answered negatively/with qualification.

Correct answer D: Only the appointed auditor may sign/authenticate the auditor-required document.

Section 74 identifies the signing role; convenience does not establish appointment.

Correct answer D: The report is open to inspection by any member and is read in general meeting.

Section 75 preserves reading and member inspection; no arbitrary management-only restriction follows.

Correct answer D: Reconcile and corroborate receipts/cash/bank/member records before final balance correction.

Module 13.3(7) treats member/passbook checks as useful manipulation safeguards, with test basis and professional judgment.

Correct answer B: The Rs 20000 unmatched remittance and correct member/employer claim treatment, not automatic full cash recovery.

Deduction schedule and actual cash differ;90000-70000=20000. Apply actual contract/evidence and avoid double counting.

Correct answer C: Rs 2 lakh: required Rs 3 lakh less recorded Rs 1 lakh.

10-7=3 required;3-1=2 additional. This is an explicit non-bank exercise rule, not a universal prudential rate.

Correct answer A: Rs 5 lakh on actual Rs 20 lakh deposits.

18+2=20;20-15=5. Supplied cap is not asserted as every society's statutory cap.

Correct answer C: At least Rs 3 lakh.

Section 63(1)(a) minimum 25%;12 x.25=3. Education/unforeseen and other applicable conditions remain separate.

Correct answer D: At least 10% of net profits to the unforeseen-loss reserve.

Section 63 has separate 25% ordinary,1% education and 10% unforeseen components for MSCSs.

Correct answer B: One per cent of net profits contributed within six months from relevant financial-year close.

2023 rule 25 specifies MSCS education fund 1% and six-month payment period; do not confuse the rehabilitation fund cap.

Correct answer D: Rs 8 lakh, the lesser of Rs 1 crore and 1% of Rs 8 crore.

8 crore x.01=.08 crore=8 lakh; the qualifying history and base are explicitly supplied, not guessed.

Correct answer C: Six months from closing of the financial year for submission to the society.

Do not mix society appointment intimation, auditor acceptance and annual report clocks.

Correct answer D: 70(10) specifically concerns accounts audit reports of national cooperative societies.

Preserve the statutory national category; ordinary 73 member-report duties are distinct.

Correct answer B: The section 77 government-shareholding proviso bars this route when relevant government holdings are below 51%.

Grounds and the statutory proviso must both be read; alternative lawful routes require their own conditions.

Correct answer B: To the Central Government instead of ordinary reporting to members under 73.

Section 77(3) expressly changes recipient while retaining 73 powers/duties for the special audit.