Skip to content

CA Intermediate · Auditing and Ethics · Special Features of Audit of Different Type of Entities

CA Rohan is auditing Bharat Rural Cooperative Credit Society. Management says that as a small society it is outside any statutory audit framework and wants only a certificate of accounts. Which statement reflects the correct audit position for a cooperative society?

The audit is governed by the Cooperative Societies Act and rules applicable to that society, and the auditor follows these along with the Standards on Auditing. The Companies Act does not apply exclusively, and neither small membership nor a committee resolution can waive the statutory audit.

  1. AAudit is governed by the Cooperative Societies Act and rules applicable to the society, so the auditor must follow those provisions along with auditing standardsCorrect
  2. BAudit is governed exclusively by the Companies Act, 2013 irrespective of the society's law
  3. CNo audit is needed if the society has fewer than 100 members
  4. DAudit is optional and depends on the resolution of the managing committee

Explanation

Cooperative societies are audited under the Cooperative Societies Act or rules of the relevant state or the Multi-State Act, together with applicable standards. The Companies Act does not exclusively govern them, and a membership count or committee resolution does not remove the audit requirement.

Did you get it right without looking?

One question tells you little. A timed set on Special Features of Audit of Different Type of Entities shows your real accuracy, how long you take and where you lose marks.

Practise Special Features of Audit of Different Type of EntitiesFree diagnostic mock

More Special Features of Audit of Different Type of Entities questions