Part IXB - Co-operative Societies • Article

Article 243ZM Simplified: Audit of accounts of co-operative societies

Article 243ZM mandates that cooperative society accounts must be audited at least once every financial year. It requires state legislatures to prescribe the minimum qualifications and experience for auditors and auditing firms. The general body of the society appoints auditors from a state-approved panel, and the audit must be completed within six months of the financial year close. Audit reports of apex cooperatives must be tabled before the State Legislature.

Official Text

(1) The Legislature of a State may, by law, make provisions with respect to the maintenance of accounts by the co-operative societies and the auditing of such accounts at least once in each financial year. (2) The Legislature of a State shall, by law, lay down the minimum qualifications and experience of auditors and auditing firms that shall be eligible for auditing accounts of the co-operative societies. (3) Every co-operative society shall cause to be audited by an auditor or auditing firms referred to in clause (2) appointed by the general body of the co-operative society: Provided that such auditors or auditing firms shall be appointed from a panel approved by a State Government or an authority authorised by the State Government in this behalf. (4) The accounts of every co-operative society shall be audited within six months of the close of the financial year to which such accounts relate. (5) The audit report of the accounts of an apex co-operative society, as may be defined by the State Act, shall be laid before the State Legislature in the manner, as may be provided by the State Legislature, by law.

Simple Meaning

Explain Like Ten

Every cooperative society has to get its money records checked (audited) at least once a year. The auditors must have special training and be chosen from a list approved by the government.

Student Mode

Article 243ZM mandates that cooperative accounts must be audited at least once every financial year. It requires state legislatures to prescribe the minimum qualifications and experience for auditors and auditing firms. The general body of the society appoints auditors from a state-approved panel, and the audit must be completed within six months of the close of the financial year. Audit reports of apex cooperatives must be tabled before the State Legislature.

Example

A farmers' sugar cooperative appoints a chartered accountant from the government's approved panel to audit its annual accounts. The audit is completed within six months of the closing of the financial year, and its final audit report is presented to the state legislature because it is classified as an apex cooperative.

Key Takeaway

Article 243ZM establishes financial transparency and accountability in the cooperative sector through regular, qualified audits.

FAQs

Who appoints the auditor for a cooperative society?

The general body of the cooperative society appoints the auditor from a panel approved by the State Government or an authorized authority.

Within what period must the annual audit of a cooperative society be completed?

The audit must be completed within six months of the close of the financial year to which the accounts relate.

Quiz

From which source must a cooperative society choose its auditor?

Answer: A panel approved by the State Government

Within how many months from the close of the financial year must the audit of a cooperative society be completed?

Answer: 6 months