Section 70 of The Multi-State Co-operative Societies Act, 2002
- (1)Every multi-State co-operative society shall cause to be audited by an auditor referred to in sub-section (2), its accounts at least once in each year.
- (2)Every multi-State co-operative society shall, at each annual general meeting, appoint an auditor or auditors to hold office from the conclusion of that meeting until the conclusion of the next annual general meeting and shall, within seven days of the appointment, give intimation thereof to every auditor so appointed: Provided that such auditor or auditors may be appointed from a panel of auditors approved by the Central Registrar or from a panel of auditors, if any, prepared by the multi-State co-operative society.
- (3)Every auditor appointed under sub-section (1) shall, within thirty days of the receipt from the multi-State co-operative society of the intimation of his appointment, inform the Central Registrar in writing that he has accepted, or refused to accept, the appointment.
- (4)A retiring auditor shall be re-appointed unless--
- (a)he is not qualified for re-appointment;
- (b)he has given the multi-State co-operative society a notice in writing of his unwillingness to be re-appointed;
- (c)a resolution has been passed at the general meeting of members appointing some body instead of him or providing expressly that he shall not be re-appointed; or
- (d)where notice has been given of an intended resolution to appoint some person or persons in the place of a retiring auditor, and by reason of the death, incapacity or disqualification of that person or all those persons, as the case may be, the resolution cannot be proceeded with.
- (5)Where at an annual general meeting no auditors are appointed or re-appointed, the Central Registrar may appoint a person to fill the vacancy.
- (6)First auditor or auditors of a multi-State co-operative society shall be appointed by the board within one month of the date of registration of such society and the auditor or auditors so appointed shall hold office until the conclusion of the first annual general meeting: Provided that--
- (a)the multi-State co-operative society may, at a general meeting, remove any such auditor or all or any of such auditors and appoint in his or their places any other person or persons who have been nominated for appointment by any member of the multi-State co-operative society and of whose nomination notice has been given to the members of the multi-State co-operative society not less than fourteen days before the date of the meeting; and
- (b)if the board fails to exercise its powers under this sub-section, the multi-State co-operative society in the general meeting may appoint the first auditor or auditors.
- (7)(a) The multi-State co-operative society may fill any causal vacancy in the office of an auditor; but while any such vacancy continues, the remaining auditor or auditors, if any, may act: Provided that where such vacancy is caused by the resignation of an auditor, the vacancy shall only be filled by the multi-State co-operative society in general meeting.
- (b)Any auditor appointed in a causal vacancy shall hold office until the conclusion of the next annual general meeting.
- (8)Any auditor appointed under this section may be removed from office before the expiry of his term by the multi-State co-operative society in general meeting.
- (9)The remuneration of the auditors of a multi-State co-operative society--
- (a)in the case of an auditor appointed by the board or the Central Registrar may be fixed by the board or the Central Registrar, as the case may be; and
- (b)subject to clause (a), shall be fixed by the multi-State co-operative society in general meeting or in such manner as the multi-State co-operative society in general meeting may determine. Explanation.--For the purposes of this sub-section, any sums paid by the multi-State co-operative society in respect of the auditors' expenses shall be deemed to be included in the expression remuneration.
Summary
- Section 70 of this multi-state co-operative legislation outlines the complete process for appointing, paying, and managing the auditors who inspect the co-operative's yearly accounts.
- Every society must have its accounts audited at least once a year by a chartered accountant appointed at the annual general meeting from a panel approved by the Central Registrar.
- For co-operative banks and large credit or non-credit societies with deposits or turnover exceeding five hundred crore rupees, the auditor must be chosen from a special panel approved by the Central Registrar.
- The appointed auditor must notify the Central Registrar of their acceptance or refusal within thirty days of receiving notice, and they must submit their audit report within six months of the close of the financial year.
- If the board fails to appoint the first auditor within one month of registration, or if the annual general meeting fails to appoint one, the Central Registrar has the authority to appoint an auditor to fill the vacancy.
- For national level co-operative societies, the completed annual audit report must be laid before each House of Parliament for review.
Practical examples
FAQ
1. Who appoints the first auditor of a society under Section 70 of the Multi-State Co-operative Societies Act, 2002?
Under Section 70 of the Multi-State Co-operative Societies Act, 2002, the first auditor is appointed by the board of directors within one month of the registration of the society, and this auditor holds office until the first annual general meeting.
2. Within what time frame must an auditor submit the audit report under Section 70 of the Multi-State Co-operative Societies Act, 2002?
Under Section 70 of the Multi-State Co-operative Societies Act, 2002, the appointed auditor must submit the audit report to the society within six months from the date of closing of the financial year to which the accounts relate.
3. What happens if the annual general meeting fails to appoint an auditor under Section 70 of the Multi-State Co-operative Societies Act, 2002?
Under Section 70 of the Multi-State Co-operative Societies Act, 2002, if no auditor is appointed or re-appointed at the annual general meeting, the Central Registrar has the power to appoint a person to fill the vacancy.
4. Are there special audit panel rules for societies with a turnover or deposits above five hundred crore rupees under Section 70 of the Multi-State Co-operative Societies Act, 2002?
Yes, under Section 70 of the Multi-State Co-operative Societies Act, 2002, co-operative banks, credit societies with deposits above five hundred crore rupees, and non-credit societies with a turnover above five hundred crore rupees must appoint their auditors from a panel of auditors approved for such societies by the Central Registrar.
Test yourself
Q1.Under Section 70 of the Multi-State Co-operative Societies Act, 2002, within how many days of receiving the intimation of appointment must an auditor inform the Central Registrar whether they accept or refuse the appointment?
Q2.Under Section 70 of the Multi-State Co-operative Societies Act, 2002, the first auditor or auditors of a newly registered multi-state co-operative society must be appointed by the board of directors within what period from the date of registration?
Q3.Under Section 70 of the Multi-State Co-operative Societies Act, 2002, whose audit reports must be laid before each House of Parliament?
Q4.Under Section 70 of the Multi-State Co-operative Societies Act, 2002, if an auditor's vacancy is caused by death or resignation, who is authorized to fill this casual vacancy and from where?
Q5.Under Section 70 of the Multi-State Co-operative Societies Act, 2002, how many days' notice must be given to the members of a multi-state co-operative society before removing the first auditor at a general meeting?