Short Answer

The Audit Committee in a society plays a crucial role in overseeing the financial reporting process, internal controls, and audit functions to ensure transparency and accountability.

Detailed Explanation

Section 77 of the Gujarat Cooperative Societies Act, 1961 empowers cooperative societies to appoint an Audit Committee. This committee is responsible for reviewing the financial statements, internal controls, and audit processes of the society. The committee ensures that the financial records are accurate, reliable, and comply with legal requirements. They also oversee the appointment of auditors and review their reports to identify any irregularities or discrepancies.

Rule 68 of the Gujarat Cooperative Societies Rules, 1965 further elaborates on the functions of the Audit Committee. It specifies that the committee should meet regularly to review financial statements, internal audit reports, and compliance with accounting standards. The committee members are required to have financial expertise and independence to effectively carry out their duties.

In practice, the Audit Committee plays a vital role in promoting good governance and financial transparency within the society. They help in preventing fraud, errors, and mismanagement by conducting thorough reviews of financial records and audit reports. The committee's oversight ensures that the society's funds are utilized efficiently and in accordance with the law.

Real-world Scenarios

• Scenario 1: The Audit Committee of a cooperative society reviews the annual financial statements and identifies discrepancies in the expenditure records. They investigate the matter further and recommend corrective actions to improve financial controls.

• Scenario 2: During an audit, the committee discovers that the society's treasurer has been misappropriating funds for personal use. The committee promptly reports this misconduct to the society's board for appropriate action.

• Scenario 3: The Audit Committee conducts a comprehensive review of the society's internal controls and suggests implementing new procedures to enhance financial accountability and transparency.

References

• Section 77 of the Gujarat Cooperative Societies Act, 1961: Official PDF

• Rule 68 of the Gujarat Cooperative Societies Rules, 1965: Official PDF