Chartered Accountants in Karnataka have lost their legal battle against a law, that allows using the services of cost accountants to audit accounts of cooperative societies, reports Hindu.
The Karnataka Cooperative Societies (KCS) Act, 1959, had made it mandatory that auditing of cooperative societies should be assigned only to the departmental auditors or to chartered accountants under the Chartered Accountants Act, 1949.
However, in 2014, the State amended Section 63 of the Karnataka Cooperative Societies Act and allowed assigning the task of auditing to cost accountants, who come under the purview of the Cost and Works Accountant Act, 1959.
This amendment led the association of chartered accountants to file a petition before the Karnataka High Court alleging that it resulted in “encroaching on the profession of chartered accountants” and the law was amended owing to “pressure of lobbying and political pressure, brought on by members of the cost accountants’ fraternity.
The court ruled that auditing the accounts of cooperative societies is not the sole right of chartered accountants.