Social Audit

Social audit is a tool for evaluating how satisfactorily a company has discharged its social responsibilities. Social audit enables the public as well as the company to evaluate the social performance of the company According to Ahmed Belkaoui, social audit much like the financial audit - is an identification and examination of the activities of the firm in order to assess, evaluate, measure and report their impact on the immediate social environment.

Objectives and Benefits of Social Audit

        

Evaluates the social dimensions of the performance of the company. Improves the social performance of the company on the basis of the feed back provided by the social audit. Increases the public visibility of the organization Involvement of people in developmental activities ensures that money is spent where is it actually needed. Reduction of wastages. Reduction in corruption. Awareness among people. Promotes integrity and a sense of community among people. Improves the standard of governance.

Methods of Social Audit

 

Social Process Audit  Through an internal management information system Financial Statement Format Audit  the social information is presented in the conventional financial statement format MacroMacro -Micro Social Indicator Audit  evaluate the micro indicators (i.e., the companys performance) against a set of macro indicators such as national policies. Constituency Group Audit  the preference and attitudes of various constituencies (like employees, creditors, suppliers and customers) are identified and measured

Partial Social Audit  evaluates any particular aspects of social performance like energy conservation or ecological preservation Comprehensive Audit  evaluates any particular aspects of social performance like energy conservation or ecological preservation Corporate Rating Approach  an external evaluation of the companys performance by public groups like consumer organizations, social welfare organizations or media.

Social Audit Process

A. Social Benefits
      

Medical and hospital facilities Educational facilities Canteen facilities Local taxes paid to Panchayat / Municipality Environmental improvements Generation of job potential Taxes, duties, etc., paid to Government

B. Social Cost
Lay off and involuntary termination  Extra hours put in by officers voluntarily  Increase in cost of living in the vicinity on account of the plants  State services consumed electricity  Environmental Impact


C. Net Income (Total Social Benefit Social Cost)

Obstacles to Social Audit

 

 

 

Being a relatively new concept, social audit is yet to gain wide appreciation and acceptance. Being a relatively new concept, a clear and generally well accepted methodology for conducting the social audits is not available. There is no agreement as to the items to be included for social audit. It is very difficult, and in several cases even impossible, to quantify the social costs and benefits of different activities or items. There may be resistance within the company to social audit because of the time, effort, and difficulty involved in the task. There may also be resistance because of the fear of a dismal or unsatisfactory picture that may be presented by the social audit. Lack of education among the common masses

Social Audit in India

  

First comprehensive social audit in India was conducted by the TISCO in 1980 Cement Corporation of India have been making some social reporting in their annual reports Few example
Tata  Adithya Birla  Essel Mining & Industries Limited  Nike