SP Co-operative Ltd. is a large co-operative organisation engaged in multiple activities. During audit, the auditor observed that although the…

CA Intermediate · Auditing and Ethics · PYQS · May 2026
SP Co-operative Ltd. is a large co-operative organisation engaged in multiple activities. During audit, the auditor observed that although the entity maintained few primary books of accounts such as the cash book and general ledger, several subsidiary books and registers maintained were either incomplete or not maintained. The management contended that for co-operative organisation, maintenance of the subsidiary books and registers is not necessary. As an auditor, you are required to guide the management about the important subsidiary books and registers that should normally be maintained by a large co-operative organisation. OR Discuss examples of the factors that the auditor may consider significant in directing the engagement team's efforts while establishing the overall audit strategy.

Suggested Answer and Working Notes:

In case of large scale co-operative organisation, different subsidiary books and registers shall be maintained and the daily summary totals will be transferred to main Cash Book. For example: (i) Daily cash sales summary register. (ii) A register of collection from debtors if credit sales are allowed by bye-laws of society. (iii) A register of recovery of loans from salaries and directly by receipts from members in case of credit society. (iv) Loan disbursement register in case of credit society. (v) Any other columnar subsidiaries depending upon the nature and functions of society. OR Examples of the factors that the auditor may consider significant in directing the engagement team's efforts while establishing the overall audit strategy are listed as under: Volume of transactions which may determine whether it is more efficient for the auditor to rely on internal control.Significant industry developments such as changes in industry regulations and new reporting requirements.Significant changes in the financial reporting framework, such as changes in accounting standards.Other significant relevant developments, such as changes in the legal environment affecting the entity.

Topics: Special Features of Audit of Different type of Entities, Audit Strategy, Audit Planning and Audit Programme

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic