Short Answer

If the Annual General Meeting (AGM) rejects the audit report or balance sheet, the procedure involves appointing a special auditor to re-audit the accounts.

Detailed Explanation

Section 81 of the Gujarat Cooperative Societies Act, 1961 empowers the Registrar to appoint a special auditor if the audit report or balance sheet is rejected at the AGM. The special auditor will re-audit the accounts and submit a report to the Registrar.

This process ensures transparency and accuracy in financial reporting within cooperative societies. It allows for an independent review of the financial statements to address any discrepancies or concerns raised by the members during the AGM.

In practice, once the AGM rejects the audit report or balance sheet, the society must inform the Registrar about the rejection and request the appointment of a special auditor. The special auditor will then conduct a thorough examination of the financial records and prepare a revised report for submission to the Registrar.

Real-world Scenarios

• Scenario 1: During the AGM of a cooperative society, the members raise concerns about the accuracy of the financial statements. As a result, the audit report is rejected. The society then follows the procedure outlined in Section 81 to appoint a special auditor for re-audit.

• Scenario 2: In another case, the AGM rejects the balance sheet due to suspected financial irregularities. The society takes prompt action by requesting the Registrar to appoint a special auditor to investigate the matter further.

• Scenario 3: If there are disputes among the members regarding the financial accounts presented at the AGM, the rejection of the audit report triggers the appointment of a special auditor to resolve the discrepancies.

Reference

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