With the financial year coming to a close, housing societies must turn their focus to auditing their accounts. Ensuring compliance with audit regulations is crucial for maintaining financial transparency and avoiding penalties. A well-structured account audit of housing society helps identify discrepancies, streamline financial records, and build trust among residents.
Statutory audit as per society bye-laws
As per Cooperative Housing Society by-laws, financial audits must be conducted annually to ensure proper fund management. Here’s what societies need to follow:
1. Appointment of auditors
- Societies can appoint an Internal Auditor if required.
- A Statutory Auditor must be appointed at the Annual General Body Meeting (AGM) from a state-approved panel.
- The same Statutory Auditor cannot serve for more than two consecutive years.
- The audit report must be submitted as per Section 81 of the Cooperative Societies Act.
2. Timelines & responsibilities
- The Management Committee is responsible for ensuring that the account audit of the housing society is completed within four months after the financial year ends.
- The Secretary must provide all necessary records, books, and registers to the auditors.
- The committee should ensure timely submission of audit reports to prevent legal issues and penalties.
3. Audit rectification & compliance
- Upon receiving the audit report, the Secretary must prepare an audit rectification report addressing any objections or recommendations.
- This report must be presented at the next committee meeting for approval.
- Societies must complete audit rectifications within three months and submit the report to the Registrar and the AGM.
- If the committee fails to do so, members may be penalized under Sections 146 and 147 of the Cooperative Societies Act.
- Regular audits help detect fraudulent transactions, ensuring greater financial security.
How an accounting system simplifies audits
Managing society finances manually can be overwhelming. A robust society accounting software like Mygate ensures:
- Automated bookkeeping for error-free records
- Seamless audit reports with auto-generated financial statements
- Real-time expense tracking to prevent discrepancies
- Timely tax and compliance reminders
- Secure digital records that can be accessed anytime for audits
Why Regular audits matter
- Helps identify financial mismanagement before it escalates
- Ensures transparent fund allocation for maintenance and development
- Strengthens the credibility of the RWA among residents
- Prevents legal disputes related to financial irregularities
A well-maintained account audit of a housing society enhances financial discipline and strengthens the trust between residents and the management committee. Ensure your society follows a structured approach to audits and stays compliant with regulations.
For societies looking for a hassle-free audit process, Mygate’s ERP solution offers seamless financial management, ensuring compliance and accuracy. Stay ahead with automated accounting and transparent financial reporting today.
