<<–2/”>a >a href=”https://exam.pscnotes.com/social-audit-2/”>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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Social, Performance, and Efficiency Audits
Audits are a critical part of any organization’s success. They can help to identify areas where the organization can improve, ensure that it is meeting its objectives, and protect its stakeholders. There are three main types of audits: social audits, performance audits, and efficiency audits.
Social audits evaluate the social impact of an organization’s activities. They can be used to assess the organization’s compliance with social standards, its impact on the community, and its contribution to social development. Social audits can be conducted by internal or external auditors, and they can be voluntary or mandatory.
Performance audits evaluate the effectiveness and efficiency of an organization’s programs and activities. They can be used to assess whether the organization is achieving its objectives, whether it is using its resources efficiently, and whether it is providing value for money. Performance audits can be conducted by internal or external auditors, and they can be voluntary or mandatory.
Efficiency audits evaluate the way an organization uses its resources. They can be used to identify areas where the organization can improve its efficiency, such as by reducing costs or improving productivity. Efficiency audits can be conducted by internal or external auditors, and they can be voluntary or mandatory.
All three types of audits can be valuable tools for organizations. However, it is important to choose the right type of audit for the organization’s needs. Social audits are most appropriate for organizations that want to assess their impact on society. Performance audits are most appropriate for organizations that want to assess their effectiveness and efficiency. Efficiency audits are most appropriate for organizations that want to assess the way they use their resources.
Audits can be a valuable tool for organizations of all sizes. They can help to identify areas where the organization can improve, ensure that it is meeting its objectives, and protect its stakeholders. When choosing an audit, it is important to consider the organization’s needs and objectives.
Social Audits
A social audit is an evaluation of the social impact of an organization’s activities. It can be used to assess the organization’s compliance with social standards, its impact on the community, and its contribution to social development.
Social audits can be conducted by internal or external auditors, and they can be voluntary or mandatory. Voluntary social audits are conducted at the discretion of the organization, while mandatory social audits are required by law or regulation.
The purpose of a social audit is to provide an independent assessment of the organization’s social performance. The audit will typically consider the organization’s policies, procedures, and practices in relation to a range of social issues, such as Human Rights, labor rights, environmental protection, and community development.
The results of a social audit can be used to improve the organization’s social performance. The audit can also be used to communicate the organization’s social commitment to its stakeholders.
Performance Audits
A performance audit is an evaluation of the effectiveness and efficiency of an organization’s programs and activities. It can be used to assess whether the organization is achieving its objectives, whether it is using its resources efficiently, and whether it is providing value for money.
Performance audits can be conducted by internal or external auditors, and they can be voluntary or mandatory. Voluntary performance audits are conducted at the discretion of the organization, while mandatory performance audits are required by law or regulation.
The purpose of a performance audit is to provide an independent assessment of the organization’s performance. The audit will typically consider the organization’s goals, objectives, and strategies, as well as its performance in relation to these.
The results of a performance audit can be used to improve the organization’s performance. The audit can also be used to communicate the organization’s performance to its stakeholders.
Efficiency Audits
An efficiency audit is an evaluation of the way an organization uses its resources. It can be used to identify areas where the organization can improve its efficiency, such as by reducing costs or improving productivity.
Efficiency audits can be conducted by internal or external auditors, and they can be voluntary or mandatory. Voluntary efficiency audits are conducted at the discretion of the organization, while mandatory efficiency audits are required by law or regulation.
The purpose of an efficiency audit is to provide an independent assessment of the organization’s efficiency. The audit will typically consider the organization’s resources, its processes, and its controls.
The results of an efficiency audit can be used to improve the organization’s efficiency. The audit can also be used to communicate the organization’s efficiency to its stakeholders.
What is a social audit?
A social audit is a systematic assessment of the social and environmental impacts of an organization’s activities. It can be used to identify and address potential problems, as well as to improve the organization’s social and environmental performance.
What are the benefits of a social audit?
There are many benefits to conducting a social audit, including:
- Improved social and environmental performance
- Increased Transparency and Accountability
- Reduced risk of reputational damage
- Enhanced employee Morale and Productivity
- Improved relationships with stakeholders
What are the different types of social audits?
There are many different types of social audits, each with its own focus and purpose. Some common types of social audits include:
- Compliance audits: These audits assess an organization’s compliance with relevant laws and regulations.
- Performance audits: These audits assess an organization’s performance against its own social and environmental goals.
- Impact audits: These audits assess the social and environmental impacts of an organization’s activities.
- Stakeholder engagement audits: These audits assess the organization’s engagement with its stakeholders.
How do I conduct a social audit?
There are many different ways to conduct a social audit. The specific approach will vary depending on the type of audit being conducted, the organization being audited, and the resources available. However, some general steps involved in conducting a social audit include:
- Planning: The first step is to develop a plan for the audit. This plan should include the purpose of the audit, the scope of the audit, the methods to be used, and the resources required.
- Data collection: The next step is to collect data on the organization’s social and environmental performance. This data can be collected from a variety of sources, including interviews, surveys, and document reviews.
- Analysis: The data collected during the audit should be analyzed to identify potential problems and areas for improvement.
- Reporting: The results of the audit should be reported to the organization’s management and stakeholders. The report should include a summary of the findings, recommendations for improvement, and a plan for implementation.
- Follow-up: The final step is to follow up on the recommendations made in the audit report. This will help to ensure that the organization takes action to address the identified problems and improve its social and environmental performance.
What are 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 obtain accurate and reliable data on an organization’s social and environmental performance.
- Lack of expertise: Many organizations do not have the expertise to conduct a social audit in-house.
- Cost: Social audits can be expensive to conduct.
- Resistance from management: Some managers may be resistant to the idea of a social audit, fearing that it will reveal negative information about the organization.
What are the resources available to help organizations conduct social audits?
There are a number of resources available to help organizations conduct social audits, including:
- Professional organizations: There are a number of professional organizations that provide guidance and support to organizations conducting social audits.
- Government agencies: Some government agencies offer funding and technical assistance to organizations conducting social audits.
- Non-governmental organizations: There are a number of non-governmental organizations that provide training and support to organizations conducting social audits.
- Consultants: There are a number of consultants who specialize in conducting social audits.
What are the future trends in social auditing?
The field of social auditing is constantly evolving. Some of the future trends in social auditing include:
- Increased focus on sustainability: Organizations are increasingly focusing on sustainability, and social audits can help to assess an organization’s progress in this area.
- Increased use of technology: Technology is being used to make social audits more efficient and effective. For example, online surveys and data analysis tools can be used to collect and analyze data.
- Increased collaboration: Organizations are increasingly collaborating with other organizations to conduct social audits. This collaboration can help to improve the quality of the audit and to share the costs of the audit.
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Which of the following is not a type of audit?
(A) Financial audit
(B) Compliance audit
(C) Performance audit
(D) Social audit -
The purpose of a financial audit is to:
(A) Determine whether the financial statements are accurate and complete.
(B) Ensure that the company is in compliance with all applicable laws and regulations.
(C) Evaluate the efficiency and effectiveness of the company’s operations.
(D) Assess the company’s social and environmental impact. -
A compliance audit is an examination of a company’s records and procedures to determine whether they are in compliance with applicable laws and regulations.
(A) True
(B) False -
A performance audit is an examination of a company’s operations to determine whether they are efficient and effective.
(A) True
(B) False -
A social audit is an examination of a company’s social and environmental impact.
(A) True
(B) False -
Which of the following is not a benefit of an audit?
(A) Improved efficiency and effectiveness
(B) Reduced risk of fraud and error
(C) Increased transparency and accountability
(D) Improved public image -
The cost of an audit is typically a small Percentage of the overall cost of doing business.
(A) True
(B) False -
Audits are required by law for certain types of companies.
(A) True
(B) False -
Audits can be conducted by internal or external auditors.
(A) True
(B) False -
Internal auditors are employees of the company being audited.
(A) True
(B) False -
External auditors are independent professionals who are not employees of the company being audited.
(A) True
(B) False -
Audits can be conducted on a regular or ad hoc basis.
(A) True
(B) False -
Regular audits are typically conducted annually.
(A) True
(B) False -
Ad hoc audits are conducted as needed, such when there is a suspicion of fraud or when the company is undergoing a major change.
(A) True
(B) False -
The results of an audit are typically reported to the company’s management and board of directors.
(A) True
(B) False -
The results of an audit may also be reported to shareholders, regulators, and the public.
(A) True
(B) False -
Audits can help companies to identify and correct problems, improve efficiency and effectiveness, and reduce risk.
(A) True
(B) False -
Audits can also help companies to comply with laws and regulations, improve public image, and attract investors.
(A) True
(B) False -
Audits are an important part of Corporate Governance.
(A) True
(B) False -
Corporate governance is the system of rules, practices, and processes by which a company is directed and controlled.
(A) True
(B) False