The process of appointing auditors for cooperatives is expected to become more transparent. So far the chartered accountants taking up the audit of an urban cooperative bank or a cooperative society would directly get empanelled with the state’s cooperation department.
It has now been decided that the panel of auditors would be prepared taking the Institute of Chartered Accountants of India (ICAI), the CAs’ professional body, into confidence. “There were certain complaints by other professionals alleging that the earlier process was flawed as CAs could themselves empanelled,” said Julfesh Shah, the chairman of ICAI’s Western India Regional Committee (WIRC). It will now happen through the ICAI which is the governing body for the professionals.
Under the new system, which has already started, the list will be prepared under guidance of the ICAI’s representatives. A merit list of the CAs will be prepared on the basis of number of partners, experience, track record and so on. Those ranking high will get to audit banks or societies with a higher deposit, he said.
Such a merit list used to be made before, however, the process is expected to become more transparent now, said Shah. Currently the new system will be adopted only in Maharashtra which comes under the WIRC. It is expected to start in Gujarat soon, as negotiations are under way with the state’s cooperation department, Shah added.
Almost 240 cooperative banks and 8,400 cooperative societies in Maharashtra are compulsorily audited by the chartered accountants. Any bank having a deposit of Rs 50 crore and a society with Rs 10 crore have to employ a chartered accountant. The rule was introduced to ensure professional examination of the books of the cooperatives. Unlike earlier, if a firm has a partner from out of state, then no weightage will be accorded for that associate while allotting a rank under the merit list, said Shah.