Section 72 of The Multi-State Co-operative Societies Act, 2002
- (1)A person shall not be qualified for appointment as an auditor of a multi-State co-operative society unless he is a chartered accountant within the meaning of the Chartered Accountants Act, 1949 (38 of 1949).
- (2)None of the following persons shall be qualified for appointment as auditor of a multi-State cooperative society--
- (a)a body corporate;
- (b)an officer or employee of the multi-State co-operative society;
- (c)a person who is a member, or who is in the employment, of an officer or employee or the multi-State co-operative society;
- (d)a person who is indebted to the multi-State co-operative society or who has given any guarantee or provided any security in connection with the indebtedness of any third person to the multi-State co-operative society for an amount exceeding one thousand rupees.
- (3)A person shall also not be qualified for appointment as an auditor of a multi-State co-operative society if he is, by virtue of sub-section (2), disqualified for appointment as an auditor of any other body corporate or multi-State co-operative society or co-operative society.
- (4)If an auditor becomes subject, after his appointment, to any of the disqualifications specified in sub-sections (2) and (3), he shall be deemed to have vacated his office as such.
Summary
- An auditor must be a chartered accountant, meaning a certified professional accountant under the Chartered Accountants Act, 1949.
- A body corporate, which is an incorporated company or corporate entity, is disqualified from being appointed as an auditor.
- Anyone who is an officer or employee of the cooperative cannot be appointed as its auditor.
- Any person who is a member of the cooperative, or who is employed by an officer or employee of the cooperative, is disqualified.
- No person who owes more than one thousand rupees to the cooperative, or who has guaranteed another person's debt exceeding that amount, can act as its auditor.
- An auditor who becomes subject to any of these disqualifications after being appointed is deemed to have automatically lost their position.
Practical examples
FAQ
1. Who can be appointed as an auditor under Section 72 of the Multi-State Co-operative Societies Act, 2002?
Under Section 72 of the Multi-State Co-operative Societies Act, 2002, only a person who is a chartered accountant within the meaning of the Chartered Accountants Act, 1949 can be appointed.
2. Can a corporate auditing firm be appointed as an auditor under Section 72 of the Multi-State Co-operative Societies Act, 2002?
No, under Section 72 of the Multi-State Co-operative Societies Act, 2002, a body corporate is specifically disqualified from being appointed as an auditor.
3. Does owing money to the cooperative disqualify an auditor under Section 72 of the Multi-State Co-operative Societies Act, 2002?
Yes, under Section 72 of the Multi-State Co-operative Societies Act, 2002, any person who is indebted to the cooperative for an amount exceeding one thousand rupees is disqualified.
4. What happens if an auditor becomes disqualified during their term under Section 72 of the Multi-State Co-operative Societies Act, 2002?
Under Section 72 of the Multi-State Co-operative Societies Act, 2002, if an auditor becomes disqualified during their tenure, they are deemed to have automatically vacated their office.
Test yourself
Q1.Under Section 72 of The Multi-State Co-operative Societies Act, 2002, an auditor must hold professional qualifications under which law?
Q2.Under Section 72 of The Multi-State Co-operative Societies Act, 2002, which of the following is specifically disqualified from being appointed as an auditor?
Q3.Under Section 72 of The Multi-State Co-operative Societies Act, 2002, what is the maximum amount of debt or security guarantee an auditor can have with the cooperative before being disqualified?
Q4.Under Section 72 of The Multi-State Co-operative Societies Act, 2002, what is the legal status of an auditor who becomes indebted to the cooperative for an amount exceeding one thousand rupees after their appointment?