Short Answer

No, the society is not allowed to appoint the same auditor consecutively indefinitely.

Detailed Explanation

Section 81 of the Gujarat Cooperative Societies Act, 1961 states that the auditor appointed by a society shall hold office until the conclusion of the annual general meeting following the meeting at which he was appointed. This means that the auditor's term is limited to one year and does not allow for consecutive indefinite appointments. The rationale behind this provision is to ensure transparency, accountability, and independence in the auditing process of cooperative societies.

Furthermore, Rule 87 of the Gujarat Cooperative Societies Rules, 1965 elaborates on the procedure for the appointment of auditors. It specifies that the society must appoint a qualified auditor at each annual general meeting to audit the accounts of the society for the preceding financial year. This rule reinforces the requirement for a fresh appointment of an auditor each year, thereby preventing the same auditor from being appointed consecutively indefinitely.

In practice, this means that cooperative societies must rotate auditors periodically to maintain impartiality and prevent any conflicts of interest. By appointing different auditors each year, societies can benefit from diverse perspectives and ensure thorough scrutiny of their financial records. Failure to comply with these provisions may lead to legal repercussions and challenges to the validity of the audit reports.

Practical Examples

• XYZ Cooperative Society appoints Auditor A for the financial year 2020-2021. According to Section 81 of the Act, Auditor A's term will expire at the conclusion of the annual general meeting for the financial year 2021-2022, necessitating the appointment of a new auditor for the subsequent year.

• ABC Housing Cooperative appoints Auditor B for consecutive years without following the rotation requirement. This contravenes Rule 87 of the Rules, leading to potential legal issues and questions about the audit's validity.

• LMN Credit Society rotates between Auditor C and Auditor D annually, ensuring compliance with the Act and Rules while benefiting from different audit perspectives and expertise.

References

• Section 81 of the Gujarat Cooperative Societies Act, 1961: Official PDF

• Rule 87 of the Gujarat Cooperative Societies Rules, 1965: Official PDF