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CS Professional · CSR and Social Governance · Financial and Non-financial Reporting of Different Non-Corporate Entities

Gram Vikas Sahakari Sanstha, a cooperative society, has its annual accounts audited. The auditor finds that the managing committee approved loans to its own members without recording reasons in the minutes. Which reporting step best serves transparency and accountability?

The auditor should report the lapse in the audit report so the general body and the registering authority know about it. Repayment does not excuse missing minutes, and deleting entries or records would defeat transparency and accountability.

  1. AIgnore the matter since the loans were repaid
  2. BReport the lapse in the audit report so the general body and registering authority are informedCorrect
  3. CDelete the loan entries from the books
  4. DAsk the committee to remove the minutes book

Explanation

An auditor's role is to report observed irregularities, including weak governance records, to those charged with oversight. Hiding or altering records defeats accountability, and repayment does not cure the documentation lapse.

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