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

CA Rohan is the auditor of Kisan Vikas Sahakari Dugdh Utpadak Sangh, a co-operative society. Which statement correctly describes his position?

The auditor must follow the audit provisions of the applicable Co-operative Societies Act and rules, while also applying the Standards on Auditing. The SAs are not limited to companies, so the society's specific statute and the SAs operate together in the audit.

  1. ACo-operative society audit is governed by the Companies Act, 2013 irrespective of the state law
  2. BThe auditor must follow the audit provisions of the applicable Co-operative Societies Act and rules, and the Standards on Auditing continue to apply to the auditCorrect
  3. CStandards on Auditing do not apply because a co-operative society is not a company
  4. DThe auditor need not report on compliance with the society's bye-laws

Explanation

Co-operative societies are governed by their specific statute and rules, and audit is done under that law. Standards on Auditing still apply to audits of financial statements irrespective of entity type. Option C is wrong because SAs are not restricted to companies.

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