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

Shree Sewa Samiti, a registered society in Pune, has a year-end balance sheet showing a surplus of funds over expenses, but its members ask why the annual accounts must be presented to them at the general body meeting. Which statement best reflects the accountability purpose of this requirement?

Presenting annual accounts to the general body lets members examine how office-bearers used the society's funds and hold them accountable. It is a stewardship tool, not a way to avoid audit, change legal status, or permit distribution of surplus to members.

  1. AIt lets members check how funds were used by the office-bearers and hold them answerableCorrect
  2. BIt converts the society into a company for audit purposes
  3. CIt removes the need for any external audit of the society
  4. DIt allows office-bearers to distribute surplus among members

Explanation

Placing audited accounts before the general body is a stewardship and accountability mechanism: members see how resources were applied. It does not change the legal form, replace audit, or permit distribution of surplus, which non-profit societies cannot do among members.

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