Cost Accountants may be authorised to audit co-operative societies where auditing is not reserved exclusively for Chartered Accountants.

The Karnataka High Court upheld the amendment to Section 63 of the Karnataka Co-operative Societies Act, 1959, which permits Cost Accountants and cost accountant firms to audit co-operative society accounts. It held that auditing co-operative societies was not shown to be the exclusive preserve of Chartered Accountants and that the amendment did not authorise Cost Accountants to perform any function reserved solely for Chartered Accountants. The statutory scheme was treated as allowing Cost Accountants to be included within the class of authorised auditors, so no legal infirmity was established in the amended provision and the writ petitions failed.

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Issues: Whether the amendment to Section 63 of the Karnataka Co-operative Societies Act, 1959, enabling Cost Accountants and cost accountant firms to audit co-operative society accounts, was invalid for encroaching upon the professional field of Chartered Accountants.

Analysis: The challenge proceeded on the premise that auditing of co-operative societies was the exclusive preserve of Chartered Accountants and that the amendment permitting Cost Accountants to act as auditors was inconsistent with the constitutional scheme and the governing professional statutes. The Court found that the impugned amendment did not enable a Cost Accountant to perform any function reserved exclusively to a Chartered Accountant. It was further noticed that auditing of co-operative society accounts was not shown to be the exclusive domain of Chartered Accountants and that the statutory scheme permitted inclusion of Cost Accountants within the audit framework.

Conclusion: The amendment was upheld and the challenge failed.

Final Conclusion: The petitioners did not establish any legal infirmity in the amended audit provision, and the writ petitions were dismissed.

Ratio Decidendi: Where the statute does not reserve auditing exclusively to Chartered Accountants, the legislature may validly include Cost Accountants within the class of authorised auditors.

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