You have been appointed as an auditor of Co-operative society. During the course of audit, you have noticed some serious irregularities in the…

Special report to the Registrar: During the course of audit, if the auditor notices that there are some serious irregularities in the working of the society he may report these special matters to the Registrar, drawing his specific attention to the points. The Registrar on receipt of such a special report may take necessary action against the society. In the following cases, for instance, a special report may become necessary: (i) Personal profiteering by members of managing committee in transactions of the society, which are ultimately detrimental to the interest of the society. (ii) Detection of fraud relating to expenses, purchases, property and stores of the society. (iii) Specific examples of mis-management. Decisions of management against co-operative principles. (iv) In the case of urban co-operative banks, disproportionate advances to vested interest groups, such as relatives of management, and deliberate negligence about the recovery thereof. Cases of reckless advancing, where the management is negligent about taking adequate security and proper safeguards for judging the credit worthiness of the party.