Independent audit by CAs not binding on coops: Special Officer

Published: 28th December 2012 11:11 AM  |   Last Updated: 28th December 2012 11:11 AM   |  A+A-

As the Rajya Sabha has also passed the Banking Regulation Amendment Bill, the State Government is poised to either pass the Cooperative Amendment Bill in the Assembly or introduce an ordinance in this regard soon.

 The government had included the Bill in the business of the recently-concluded session only to be removed at the end following difference of opinion over the clauses in the Bill regarding the audit cost to be borne by the societies.

 Speaking to Express, S Ravindran, Managing Director, State Cooperative Bank, and Special officer, Cooperative Amendment, said that the Cooperative Congress had discussed various issues concerning the sector including that of the Amendment Bill. But there were complaints that all those interested had not received sufficient time for discussion.

 He said that the government would either have to pass the Bill in the Assembly or  introduce the ordinance before February 15, 2013, to comply with the  provisions of the Central Act.

 Referring to the complications being faced by primary agricultural cooperatives in bearing the audit cost, he said the new amendment will clear the confusions. Asked whether such societies could opt for  independent audit by chartered accountants as required by the Banking Regulation Act and accepted by the Reserve Bank of India (RBI), he said as per the Central Act, the State Government can have the option of either independent audit by chartered accountants or statutory audit by cooperative auditors.

 He, however, said that the RBI would have to comply with the provisions of the  amendment Act and there would not be a situation forcing the societies to go for  both audit.

 ‘’The State Government will have the option of selecting either the statutory audit or audit by chartered accountants. And RBI will have to comply with the provisions of the Act’’ he said.

 He pointed out that societies will have to select from the auditors panel approved by the government.

  However, State Cooperative auditors are apprehensive of the new amendment.

 They point out that the 53 urban cooperative banks in the state are now conducting statutory audit and audit by chartered accountants. But the RBI was approving only the audit by chartered accountants.   Moreover, they point out that in spite of conducting two audits, two urban banks in the state namely the Urban Bank, Adoor, and Urban Bank, Tanur, are facing liquidation. ‘’If the independent audit was so effective how did those banks meet with such a debacle,’’ an  auditor  who preferred anonymity asked.

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