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Unit 13: Audit of Banking and Insurance Company

year ended on that date. The auditor should always be kind and courteous in his relations with Notes
both officials and non-officials. His reports should be in polite, courteous and clear language.
He should act without fear or favor.

Powers

Sub-sections (3) and (4) of Section 63 of the K.C.S. Act contain provisions relating to the powers
of auditors.
Under Section 63(3) of the K.C.S. Act, the Director of Co-operative Audit or the person authorized
by him shall at all times have access to all the books, accounts, documents, papers, securities,
cash and other properties belonging to, or in the custody of the society and may summon any
person in possession or responsible for the custody of any such books, accounts, documents,
paper, securities, cash or other properties, to produce the same at any public office at the
headquarters of the society or any branch thereof.
Under Section 63(4) of the K.C.S. Act, every person who is or has at any time been an officer or
employee of the society and every member and past member of the society shall furnish, such
information in regard to the transactions and working of the society as the Director of
Co-operative Audit or the person authorized by him may require. Failure of an officer/
employee/member of a Co-operative Society in possession of any information, books or records
to furnish such information or produce such books or records or to give assistance to the person
authorized to audit the accounts of the society under section 63 of the Act is an offence and is
punishable under Section 109 of the Act.
Under Section 66 of the K.C.S. Act, if any officer or person conducting audit under Section 63 of
the K.C.S. Act, has reason to believe that any books or other property of the society have been
tampered with or are likely to be tampered with, if left with the society with a view to eliminate
or efface or change or manipulate any evidence which may be deemed necessary by such officer
or person in connection with the proof of any defect or irregularities noticed by him during the
course of audit, he shall have the power to seize and impound such books or property in such
manner and for such period as may be prescribed. The manner for seizure and the period for
which they could be impounded are laid down in Rule 53 A of the K.C.S. Rules.

13.2.13 Supervision of Audit

A system of supervision of audit is in vogue in the Department. This is not in the nature of test
audit in as much as it not a re-audit. Special feature of supervision of Audit is that the work done
by the Auditors and the Audit Report prepared by him are being scrutinized by visiting to the
society before the Audit Report is issued.
The supervising officer should verify the draft audit report and financial statements with reference
to the relevant records maintained in the society in order to ensure the correctness of the draft
audit report. Any modifications if required, to be informed in writing to the concerned auditor.
Apart from this, he should also ensure the following:
1. Supervising Officer should review the action taken by the Institution to rectify the mistakes
and omissions pointed out in previous audit reports and make a comment if the action
taken has not been satisfactory.
2. He should see whether the Auditor has verified the investments and securities and sought
confirmation letters from various Debtor and Banker of the society/Institutions and
conducted personal verification of loans.

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