Accounts Notes: Multi State Co-operative Societies Act 2002

Friday 25 March 2011

Multi State Co-operative Societies Act 2002

 Books of A/c: w.r.t :
(i) All sum of money received & expended & matters of receipt / exps.
(ii) All sale & Purchase of goods.
(iii) All assets & liabilities.
(iv) For MSCOS engaged in production, processing & manufacturing their, utilization of materials or labour or other items of cost as may be specified in by-laws of society.

 Qualification of Auditors (Sec. 72): A chartered accountant under CA Act, 1949.Disqualification:
(i) Body corporate.
(ii) Officer / Employee of MSCOS.
(iii) Partner / Employee of Officer / Employee of MSCOS.
(iv) Indebted / Guarantor for amount > 1000/-

 Appointed of auditors (Sec. 70):
(i) First auditor by board within one month of registration date to hold office until conclusion of 1st AGM. It board fails then in general meeting.
(ii) Subsequent auditor at each AGM to hold office from conclusion of that meeting until conclusion of next AGM.

 Power & Duties of Auditors (Sec. 73): Right to access at all times to books, A/C5 & Vouchers to require information & explanation from employee / officers etc.
Following inquiries shall be made [73 (2)]
(i) Loans & advances made by MSCOS on basis of security, properly secured & whether terms aren’t prejudicial to interest of MSCOS / members.
(ii) Transaction of MSCOS represented merely by book entries are not prejudicial to interest.
(iii) Whether personal Exps. have been charged to revenue.
(iv) In case it is stated in Books of MSCOS that any shares have been alloted for cash whether cash actually been received & if no cash has been so received, whether positions stated in books & B/s are correct & not misleading.
 Contents of Auditors report (Sec. 73): To member of MSCOS:
Sec 73 (3):
(i) B/s. True & fair view of sate of affairs &
(ii) P&L A/c. True & fair view of Profit or Loss:
Sec 73 (4):
(i) Whether obtained all information & explanation ………………
(ii) Whether, proper books of A/c kept by MSCOS & proper returns received from branches ……….
(iii) Whether report on A/c of any branch office forwarded to him & how he dealt with the same ……..
(iv) Whether MSCOS’s B/s & P&L A/c are in agreement with the books of account & return. Where any matters aforesaid are in negative reasons.

 Special Audit of MSCOS (Sec. 77)
 In case Central Government or State Government either alone or both hold 51% or more of paid-up share cap. In such MSCOS.
 Central Government may direct either a C.A or MSCOS’s auditor to conducts special audit & make a report to it.
 Cases for special audit:
(i) Central Government is of opinion that affairs of MSCOS aren’t being managed in accordance with self help & Co-operative principles or sound business principles or:
(ii) MSCOS managed in manner likely to cause serious injury / damage to interest of trade / industry or business to which it pertains or
(iii) That the financial position of any MSCOS is such as to endeager its solvency.
 Auditor has same powers & duties as in Sec. 73.
 On receipt of report of special audit, Central Government may take such action as it considers necessary.

 Inquiry by Central Registrar (Sec. 78)
 Central Registrar may:
(i) On request from federal co-operation to which MSCOS is affiliated or
(ii) A creditor or
(iii) At least 1/3 of member of board or
(iv) At least 1/5 of total member of MSCOS holds an enquiry or direct some person to enquire into constitutions, working & financial condition of MSCOS. However before inquiry, 15 days notice to be given to MSCOS.
 Central Registrar or person authorised, shall have following powers:
(i) Free access to books / A/c / Cash / Properties in custody of MSCOS & summon any person to produce the same at any place specified by him.
(ii) Require the officer to call AGM by giving notice of at least 7 days or if officers fail / refuses, he may call it himself.
(iii) Summon any person having knowledge to appear before him & examine him on oath.
 Central Registrar with 3 months of receipt of report communicate the report of enquiry to society, FI & to person at whose instance it is needed.

 Inspection of MSCOS (Sec. 79)
 Central Registrar may ………… (required by same as in case of inquiry)
 Powers:
(i) Access to books / sec …………. In event of serious irregularity, take them into custody, verify the cash balance of society & subject to permission of Central Registrar call a meeting, if necessary.
(ii) Every officer / member shall furnish information w.r.t. working of society as required by Central Registrar.
 Copy of report within 3 months communicated to MSCOS.