Short Answer

Yes, a society audit is mandatory every year.

Detailed Explanation

Section 81 of the Gujarat Cooperative Societies Act, 1961 mandates that every cooperative society shall be audited at least once in each cooperative year. This means that societies are required to conduct an audit annually to ensure proper financial management and compliance with legal requirements. The audit is essential to verify the accuracy of financial records, detect any irregularities, and provide transparency to the members of the society.

Furthermore, Rule 67 of the Gujarat Cooperative Societies Rules, 1965 specifies the procedure for conducting the audit of cooperative societies. The audit must be carried out by a qualified auditor appointed by the society's general body. The auditor is required to examine the society's financial statements, books of accounts, and other relevant documents to assess the financial health and compliance of the society.

In practice, the society audit involves a thorough examination of the financial transactions, assets, liabilities, and compliance with the Cooperative Societies Act and Rules. The auditor prepares a detailed audit report highlighting any discrepancies, financial mismanagement, or non-compliance issues. This report is crucial for the members of the society, regulatory authorities, and other stakeholders to assess the financial health and governance of the society.

Real-world Scenarios

• Example: ABC Cooperative Society appoints a qualified auditor annually to conduct its society audit as mandated by the Gujarat Cooperative Societies Act, 1961. The auditor reviews the society's financial records, prepares an audit report, and presents it to the general body for approval.

• Example: XYZ Cooperative Society fails to conduct its annual audit for two consecutive years, leading to regulatory non-compliance and financial uncertainty among its members. The Registrar of Cooperative Societies may take enforcement action against the society for non-compliance with audit requirements.

References

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

• Rule 67 of the Gujarat Cooperative Societies Rules, 1965: Official PDF