The pre-audit checklist — what your auditor will actually ask for
What to have ready before your society's annual audit, the three reconciliations every auditor runs first, and what the Income-tax Act 2025's new "tax year" changes on this year's paperwork.
Written by the Societly team
Last verified 1 September 2026 · 4 sources
Most committees treat the annual audit as something that happens to them. A date arrives, an auditor asks for things, somebody spends three weekends finding them, and the accounts reach the general body later than anyone wanted.
The difference between a two-week audit and a two-month one is almost entirely what you have ready on day one. Very little of it is accounting skill. It is filing.
First: is your society even required to be audited?
This is state law, and the answer differs sharply depending on where you are.
Maharashtra co-operative housing societies have a statutory audit. Section 81(1)(a) of the Maharashtra Co-operative Societies Act, 1960 requires the accounts to be "completed within a period of four months from the close of financial year" — so 31 July for a year ending 31 March. The auditor is appointed by the general body from a panel prepared by the Registrar and approved by the State Government (section 75(2A)), and under section 81(5B) the auditor must submit the report "within a period of one month from its completion and in any case before issuance of notice of the annual general body meeting", to both the society and the Registrar.
Read that last clause carefully, because it sets your real deadline. The audit report has to exist before the AGM notice goes out — not before the AGM.
Karnataka apartment associations have no equivalent machinery. The Karnataka Apartment Ownership Act, 1972 has no state model bye-law; section 16(3) leaves "the audit and accounts and administration of the property" to what your association itself registered. So the binding timetable is whatever your own bye-laws say — and many say very little. See what a Karnataka association's accounts should show for what a well-run association keeps regardless.
Either way, the practical rule holds everywhere: you cannot sensibly place unaudited accounts before the general body, whatever your state requires.
What to have ready before day one
Assemble this before the auditor asks. Every item on it will be asked for.
Governing documents
- Registration certificate, and the registered bye-laws currently in force
- The Deed of Declaration and Deeds of Apartment, where they apply
- Register of members and apartments, with undivided interest percentages
The books
- Cash book and bank book for the full year
- General ledger, and member-wise ledgers
- Bank statements for every account, for the whole year, plus monthly reconciliations
- Fixed deposit certificates and the register of investments
- Fixed asset register — lifts, DG sets, pumps, STP, WTP
The evidence behind the numbers
- Vouchers for expenditure, each with the approval that authorised it
- Contracts and AMCs, with the quotation comparisons that preceded them
- Committee resolutions authorising expenditure above your bye-law threshold
- Receipts issued, in sequence
Compliance
- TDS challans and quarterly returns
- GST returns, if the association is registered
- Minutes books for committee and general body meetings
Last year
- The previous audited accounts, the previous audit report, and the committee's written replies to each of its objections
That last item is the one most often missing, and it matters more than its size suggests. We come back to it below.
The three reconciliations they will run first
An experienced auditor goes to the same three places before looking at anything else, because these catch most of what goes wrong.
Bank reconciliation, month by month. Book balance against the bank statement, with every difference explained. A difference carried unexplained for more than a month or two is not a rounding issue — it is an entry error, or something that needs a better answer.
Fund balances against actual investments. Corpus and sinking fund balances in the books should trace to fixed deposits held in the association's name. If they do not, the funds have been used for operations, which the general body almost certainly never approved.
Arrears roll-forward. Opening arrears, plus billed, minus collected, minus written off, should equal closing arrears. If it does not tie, a bill was raised outside the system or a receipt was applied to the wrong apartment.
Run all three yourself before the auditor does. Each one you have already reconciled is a week you do not spend explaining.
Age the arrears before you are asked
A single outstanding-dues figure tells the auditor — and the general body — almost nothing. Two associations can both report ₹10 lakh outstanding and be in entirely different positions: one where it sits in the current and 30-day buckets, and one where most of it is over 180 days.
Illustrative figures, to show the format.
| Bucket | Apartments | Amount |
|---|---|---|
| Current (not yet due) | 52 | ₹4,10,000 |
| 1–30 days | 9 | ₹68,000 |
| 31–90 days | 4 | ₹1,12,000 |
| 91–180 days | 2 | ₹1,44,000 |
| Over 180 days | 1 | ₹2,80,000 |
The aged version is also what tells you whether you have a collection problem or a recovery problem — and in Karnataka, whether a section 19 charge on the apartment is worth acting on.
New on this year's paperwork: "tax year"
One genuinely new thing will appear in this audit cycle, and it is terminology rather than substance.
The Income-tax Act, 2025 came into force on 1 April 2026, repealing the Income-tax Act, 1961. It replaces the old pair of terms — "previous year" and "assessment year" — with a single "tax year", defined as a period of twelve months contained in a financial year. The Income Tax Department's own guidance puts the start plainly: the concept applies "from 01 April 2026, i.e., for income earned during FY 2026-27 onwards."
For a housing society, nothing about what is taxable has changed because of this. What changes is the label on the forms. Where paperwork used to carry a financial year and a separate assessment year, it now carries one tax year. For anything before 1 April 2026, references to a tax year read back to the corresponding "previous year" under the old Act, so last year's comparatives still line up.
Two related points worth checking while the auditor is with you:
- TDS on contractor payments now sits under section 393 of the 2025 Act, where it used to be section 194C. The thresholds and rates carry over unchanged. Budgeting for an apartment association covers where this bites in practice.
- Interest on the association's fixed deposits is taxable, notwithstanding mutuality. That is settled law and catches committees who assume a residents' association pays no tax at all.
Nothing here is legal or tax advice. Whether your association must be audited, by whom, and by when depends on the Act your society is registered under and your own registered bye-laws — questions for an advocate practising in your state. Anything touching income tax, TDS or GST is a question for your CA.
The part committees skip: replying to the objections
An audit report usually carries observations. The committee is expected to respond to them in writing, and those replies belong with the accounts placed before the general body.
This gets skipped almost universally, and it compounds. An objection carried unanswered across three audits stops being a note about bookkeeping and becomes, in itself, the finding — evidence that the committee saw a problem and did nothing about it. It is also the single easiest thing for a dissatisfied member to raise at the AGM, because it is written down in your own documents.
Answer each observation, even when the answer is "we disagree, for these reasons". A disagreement on record is a defensible position. Silence is not.
If your report comes back with the word "qualified" — or worse, "adverse" — what a qualified audit report actually means explains the precise, defined difference between the four kinds of opinion a Chartered Accountant can issue, and which ones are routine versus genuinely urgent.
Keep what the audit produces
The audited accounts, the audit report and the committee's replies are permanent records, not annual paperwork. So are the minutes that adopt them. Money records generally need to survive several years — GST law requires 72 months from the due date of the annual return — while governance records are kept indefinitely. What records a society must keep, and for how long sets out the different clocks.
The practical test is not whether the file exists. It is whether the association can produce the 2021 audit report this week, without depending on one person's memory or one person's laptop.
The short version
- Whether you must be audited is state law. Maharashtra: statutory, within four months of year-end, auditor from the Registrar's approved panel, report before the AGM notice issues. Karnataka: your own registered bye-laws decide.
- Assemble the file before day one — governing documents, the books, the evidence behind the numbers, compliance filings, and last year's audit report with its replies.
- Run the three reconciliations yourself: bank, funds against actual investments, arrears roll-forward.
- Age the arrears. One number hides the shape of the problem.
- Expect "tax year" on this cycle's paperwork — the Income-tax Act, 2025 replaced "previous year" and "assessment year" from 1 April 2026. Same substance, new label. TDS on contractors is now section 393.
- Reply to every audit objection in writing, and put the replies before the general body with the accounts.
- Keep the output permanently, and keep it findable.
Sources
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