Auditing Of Cooperative Housing Society

Auditing is one important step to keep a smooth functioning of the society

#Why Audit is necessary in any Organization?

Account Auditing is independent examination of financial information of any entity, whether it is profit oriented or not. Irrespective of its size small or big this examination should be done frequently. Audit is safety guard to measure all gaps, improvement and risks if any and providing opportunity to keep everything up to date. Several types of audit can be done e.g. finance, taxation, statutory, system, energy, project etc…

https://en.wikipedia.org/wiki/Audit

#Why account auditing is necessary in the Housing Society?

Housing societies, as it is one business entity, Income and Expenses transactions are the part of day to day process. Societies are having assets and investments. Therefore Audit is essential to ensure the financials and up to mark the level of other assets. In some societies only paper based auditing has done. They are skipping actual procedure which can be converted in to scrutiny later. Every society makes sure that society audit should be held as per procedure and based on the evidences to get the actual and effective results.

You Tube: Auditing of CHS

Types of audit in the Housing Society

1. Internal Audit of accounts

Needs to appoint the Internal Auditor for accounts in the AGM for next year. Who is able to finalize the accounts.(as per bye law 151)
There is no limitation for accounts auditor.
All account books, vouchers, registers and records will be verifying in the accounts audit.
Frequency – Once in year

2. Statutory Audit

Needs to appoint the Statutory Auditor in the AGM for next year. Who is from the panel of Auditor approved by State Govt. (as per bye law 151)
Statutory auditor cannot be appointed more than 2 consecutive years as per by laws.
All statutory registers e.g. I – register, J – register, Share register etc. for verification in the audit.
Frequency – Once in year

3. Structural Audit

Structural audit is an overall health check up of the building like doctor examines to the patient. It’s done to ensure following parameters i.e. performance of the building, safety of the building and risk parameters if any. The reason why it is mandatory is to protect the people of the community from any kind of dangerous circumstances like collapsing or heavy water leakage. In the report auditor specifying the remarks for damages and suggestion for repairs with photos of that particular area. The purpose is after resolving this gaps health of the building can be increase. Structural audit is mandatory for 15-30 yrs. old buildings. Building over 30 yrs. It must be conducted once in 3 yrs. All damages observed by Structural Auditor should be resolved by MC members on priority basis to maintain a health of the building.

Article: Accounting in the Housing Society

Video on Accounting in the Housing Society: https://www.youtube.com/watch?v=lW_7H_vn6nU&t=77s

Responsibility of the Audit

Managing Committee / Secretary of the society / Accountant or Society Manager are responsible to conduct this audit on time and arrange all documents, registers for verification.

What about after completion of Audit

After receiving the Audit Reports from the internal and external auditors, the Secretary is required to prepare draft audit rectification reports which include comments, objections, suggestions, corrections, clarifications on the Accounts Audit report and present the rectification report to the Managing Committee for approval before General Body Meeting. The audit rectification has to be completed within three months from the date the Accounts Audit was handed over. The same audit rectification report is submitted to the Registrar and to the members of the society at the Annual General Body Meeting.

Video on How to Manage Housing Society: https://www.youtube.com/watch?v=bdHsXI5Xz7U

Shiv Consultancy is providing the accounting and taxation services to housing societies. Subscribe our You Tube channel and click on the bell icon to get the more videos. Follow us on the Face book and Linked in.
For further details please contact us at