<–2/”>a >Social Audit
“Social Auditing is defined as a systematic attempt to identify, analyse, measure (if possible), evaluate, and monitor the effect of an organisation’s operations on Society (that is, specific social groups) and on the public well-being.”
Social audit as a term was used as far back as the 1950s. In a nutshell, it refers to the steps that are taken to ensure that the work done by the government is actually benefiting the people whom it is intended to benefit. It is based on the principle that the local governance should be carried out, as much as possible, with the Consent and in complete understanding of the requirements of the people concerned. It is a process and not an event. Thus, Social Audit is nothing but understanding, measuring, reporting, and most importantly improving the efficiency and effectiveness of the local governance. India being a welfare state, several programs and policies are implemented for the benefit of people. Politicians and executives are usually the ones who control and implement these policies. Some policies are common to all and some are special that are meant to benefit the weaker sections of the society. To implement all such policies, funds are drawn from the state exchequer. The social control over withdrawal and usage of this fund is called Social Audit.
Objectives of Social Audit Goyder defined the objectives of social audit in clear terms. He classified the objectives into two broad categories namely, 1. Principal objectives, and 2. Secondary objectives. Principal Objectives of Social Audit
The principal objectives according to Goyder are as follows. 1. The extension, development and improvement of the company’s business and building up of its financial independence. 2. The payment of a fair and regular dividend to the shareholders. 3. The payment of fair wages under the best possible conditions to the worker. 4. The reduction of prices to the consumers. Secondary Objectives of Social Audit 1. Provision of a bonus to the workers. 2. Assist in promoting the amenities of the locality. 3. Assist in developing the Industry in which the firm is a member. 4. Promote Education, research and development in the techniques of the industry. From these objectives, we can infer that social audit is really an extension of the principle of public disclosure to which corporations are subject. Need for Social Audit Each business enterprise is not only connected with internal public but intimately connected with external public also. The modem corporations are more powerful and command huge Resources. This power should not be used indifferently, irresponsibly or in an antisocial way. Its activities can create much impact on the society. As such its impact over society cannot be ignored or taken lightly. Its behaviour not only affects the society but also creates problems to the Government. Thus, social audit has become the need of the day. Social Accounting and Social Audit
Social accounting is a systematic assessment and reporting on those parts of a company’s activities, which have a social impact. It refers to the identification, measurement, recording and reporting the information as to social activities of the concern to its users (both internal and external). On the other hand, social audit refers to the systematic evaluation of an organization’s social performance. Here, its economic performance is not considered. It discloses the company’s involvement in socially oriented activities, activities taken for the well-being of the employers of the concern, activities as to prevention of Environment from pollution etc.
PERFORMANCE AUDIT
Meaning
An independent examination of the efficiency and effectiveness of government undertakings, programs or organisations, with due regard to economy, and the aim of leading to improvements”.
Performance audit is simply an audit of Sound financial management, namely of the economy, efficiency and effectiveness with which audited entities have carried out their responsibilities.
Performance Audit invariably is referred to as Value-for-Money audit or Operational audit.
Performance Audits= Value for Money Audit = Operational Audits.
Objectives of Performance Auditing
Acquire resources of the right quality, in the right quantity, at the right time and place at the lowest possible cost (Economy).
Achieve the optimal relationship between output of Services or other results and the resources used to produce them (Efficiency)
Achieve policy objectives, operational goals and other intended effects (Effectiveness).
More specifically, in the public sector, benefits of performance audit may include the following:-
Helps in the identification of problem areas, including factors that cause problems. This helps in finding alternative solutions, that is, through recommendations for improvements to policies, procedures and structure which could help in reducing wastage and inefficiencies.
Helps in evaluating performance of individuals and departments or sections in an organisation. Evidently, performance audits assist in obtaining a critical view of compliance with legal requirements, policies, objectives and procedures.
Helps citizens obtain insight into the management of different government programmes and activities. Performance audits may serve as a basis of decisions on future funding and priorities.
EFFICIENCY AUDIT
Efficiency audit is related to that whether corporate plans are effectively executed. In this, auditor investigates the reasons of variances in actual performance and planned-performance. It also investigates that capital resources of company are properly utilized. Purposes of Efficiency Audit Modern managements now-а-days undertake efficiency audit with а variety of objectives in mind. The principal objectives are: 1. То diagnoses the operational weaknesses by а review of the organization’s environment.
- То sees whether the resources of the business flow into constructive and profitable channels. 3. То assesses how far the measures and techniques adopted are effective in attaining the goals and objectives of the firm. 4. То highlights the important fact in each of the functions or operations that are employed. 5. То evaluates and compares the optimum return on capital invested in the business operations. б. То suggest and recommend feasible alternative treatments for improvements in а manner that the heads of the functional or operational management themselves would do if they have time for self — introspection (Examination of their own thoughts and feelings).
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A social audit is a systematic assessment of an organization’s social performance. It can be used to identify and address social issues, such as labor rights, environmental sustainability, and community relations. Social audits can be conducted by internal or external auditors, and they can be voluntary or mandatory.
Social audits can provide a number of benefits, including:
- Improved social performance
- Increased Transparency and Accountability
- Enhanced reputation and brand value
- Reduced risk of social conflict
- Improved employee Morale and Productivity
There are a number of different types of social audits, including:
- Compliance audits assess an organization’s compliance with laws and regulations.
- Stakeholder audits assess an organization’s impact on its stakeholders, such as employees, customers, and communities.
- Value chain audits assess an organization’s social performance throughout its supply chain.
The social audit process typically involves the following steps:
- Planning. The first step is to develop a plan for the audit, which should include the purpose of the audit, the scope of the audit, the methodology to be used, and the resources required.
- Data collection. The next step is to collect data on the organization’s social performance. This data can be collected from a variety of sources, such as interviews, surveys, and document reviews.
- Analysis. The data collected is then analyzed to identify social issues and trends.
- Reporting. The findings of the audit are then reported to the organization’s management and stakeholders.
- Recommendations. The audit report should include recommendations for how the organization can improve its social performance.
- Implementation. The organization should then implement the recommendations from the audit report.
- Follow-up. The organization should follow up on the implementation of the recommendations to ensure that they are effective.
There are a number of tools that can be used to conduct social audits, including:
- Interviews. Interviews can be conducted with employees, customers, suppliers, and other stakeholders.
- Surveys. Surveys can be used to collect data from a large number of people.
- Document reviews. Document reviews can be used to collect data from internal documents, such as policies and procedures, and external documents, such as reports and news articles.
- Observations. Observations can be used to collect data on the organization’s social performance.
The social audit report should be clear, concise, and easy to understand. It should include the following information:
- The purpose of the audit
- The scope of the audit
- The methodology used
- The findings of the audit
- Recommendations for improvement
- A plan for implementation
Social audits can face a number of challenges, including:
- Access to data. It can be difficult to obtain data on an organization’s social performance.
- Lack of cooperation. Organizations may not be willing to cooperate with social audits.
- Cost. Social audits can be expensive to conduct.
- Time. Social audits can take a long time to complete.
Despite the challenges, social audits can be a valuable tool for improving an organization’s social performance.
The future of social audits is likely to be bright. As more and more organizations become aware of the importance of social responsibility, they will be more likely to conduct social audits. Additionally, as the technology for conducting social audits improves, it will become easier and more cost-effective to conduct these audits. As a result, social audits are likely to become an increasingly common tool for organizations that are looking to improve their social performance.
What is a social audit?
A social audit is a process of assessing the social impact of an organization’s activities. It can be used to identify and address potential or actual social problems, and to improve the organization’s social performance.
What are the benefits of a social audit?
There are many benefits to conducting a social audit, including:
- Improved social performance: A social audit can help an organization identify and address potential or actual social problems, and to improve its social performance.
- Increased transparency: A social audit can help an organization to be more transparent about its social impact, which can build trust with stakeholders.
- Improved reputation: A social audit can help an organization to improve its reputation by demonstrating its commitment to social responsibility.
- Reduced risk: A social audit can help an organization to identify and address potential risks, which can help to reduce the organization’s risk of social problems.
What are the steps involved in conducting a social audit?
The steps involved in conducting a social audit vary depending on the organization and the scope of the audit. However, some common steps include:
- Planning: The first step is to plan the audit. This includes identifying the purpose of the audit, the scope of the audit, and the resources that will be needed.
- Data collection: The next step is to collect data on the organization’s social impact. This data can be collected from a variety of sources, including interviews, surveys, and document reviews.
- Analysis: The data collected is then analyzed to identify potential or actual social problems.
- Recommendations: The audit team then makes recommendations for how the organization can address the social problems that have been identified.
- Implementation: The organization then implements the recommendations made by the audit team.
- Monitoring: The organization then monitors the implementation of the recommendations and makes adjustments as needed.
What are some of the challenges of conducting a social audit?
There are a number of challenges associated with conducting a social audit, including:
- Access to data: It can be difficult to access data on an organization’s social impact. This is because data is often siloed across different departments and divisions within an organization.
- Cost: Social audits can be expensive to conduct. This is because they require a significant amount of time and resources.
- Time: Social audits can take a long time to complete. This is because they require a thorough analysis of the organization’s social impact.
- Resistance to change: Organizations may be resistant to change, which can make it difficult to implement the recommendations made by a social audit.
What are some of the resources available to help organizations conduct a social audit?
There are a number of resources available to help organizations conduct a social audit, including:
- The Social Audit Toolkit: The Social Audit Toolkit is a comprehensive resource that provides guidance on how to conduct a social audit.
- The Social Audit Network: The Social Audit Network is a network of organizations that support social auditing.
- The Social Audit Standards Board: The Social Audit Standards Board is a non-profit organization that develops and maintains standards for social auditing.
What are some of the best practices for conducting a social audit?
There are a number of best practices for conducting a social audit, including:
- Involve stakeholders: Stakeholders should be involved in the planning and implementation of the social audit. This will help to ensure that the audit is relevant and credible.
- Use a participatory approach: A participatory approach should be used to collect data and analyze the findings. This will help to ensure that the audit is inclusive and representative of the organization’s social impact.
- Be transparent: The organization should be transparent about the social audit process and the findings of the audit. This will help to build trust with stakeholders.
- Follow up: The organization should follow up on the recommendations made by the social audit. This will help to ensure that the recommendations are implemented and that the organization’s social performance improves.
Question 1
Which of the following is not a type of audit?
(A) Financial audit
(B) Operational audit
(C) Social audit
(D) Environmental audit
Answer (C)
A social audit is a type of audit that assesses the social and environmental impact of an organization. It is not a type of financial or operational audit.
Question 2
The purpose of a social audit is to:
(A) Assess the organization’s compliance with social and environmental standards
(B) Identify opportunities for improvement in the organization’s social and environmental performance
(C) Communicate the organization’s social and environmental performance to stakeholders
(D) All of the above
Answer (D)
A social audit can be used to assess an organization’s compliance with social and environmental standards, identify opportunities for improvement in the organization’s social and environmental performance, and communicate the organization’s social and environmental performance to stakeholders.
Question 3
Which of the following is not a stakeholder of an organization?
(A) Employees
(B) Customers
(C) Shareholders
(D) The government
Answer (D)
The government is not a stakeholder of an organization in the same way that employees, customers, and shareholders are. The government is a regulator of organizations, but it is not typically a customer or supplier of an organization’s products or services.
Question 4
Which of the following is not a method of conducting a social audit?
(A) Self-assessment
(B) Third-party assessment
(C) Stakeholder engagement
(D) Environmental impact assessment
Answer (D)
An environmental impact assessment is a type of environmental audit, not a social audit. Social audits can be conducted using a variety of methods, including self-assessment, third-party assessment, and stakeholder engagement.
Question 5
Which of the following is not a benefit of conducting a social audit?
(A) Improved social and environmental performance
(B) Increased stakeholder engagement
(C) Reduced risk of reputational damage
(D) Improved financial performance
Answer (D)
A social audit can improve an organization’s social and environmental performance, increase stakeholder engagement, and reduce the risk of reputational damage. However, there is no evidence that social audits improve financial performance.