Social Audit: Definition, Example, Importance, Objectives & Components

The process begins when people who feel they have been negatively affected by a certain project come forward and make their grievances known to the government or private company that is involved in the project. If it is found that these people are indeed correct, an investigation will be conducted into how things were handled throughout the project. If it is revealed that the process was flawed, the company will acknowledge its mistake and put a plan into action to fix issues that have been found. A social audit is a tool used to assess the effects of different programs and policies on communities. The main goal of a social audit is to allow people who were negatively affected by certain projects, such as land acquisition for development projects, a chance to voice their concerns about how they have been affected.

2.3 Characteristics of Audit Evidence

That said, the specific responsibilities aren’t uniform in a global supply chain. It is highly essential as it helps the local communities with planning function, supports democracy, encourages the involvement of the communities, and benefits not just individuals. Still, their families also assist the human resource development and growth, enhance the company’s image in the eyes of the investors, promote decision making, and so on. Payroll and attendance records may reveal subtle and not-so-subtle inequities in a company. These records can indicate if employees are receiving minimum wage and proper overtime wages and if they are working legal hours. If the company is keeping hand-written records rather than using electronic or punch-card methods, maximum hours can be difficult to determine.

What were some issues found through a social audit?

It takes into account any internal code of conduct as well as the views of all stakeholders and draws on best practice factors of total quality management and human resource development. Like internal auditing, social auditing requires an organization to identify what it is seeking to achieve, who the stakeholders are, and how it wants to measure performance. Social auditing provides an assessment of the impact of an organization’s nonfinancial objectives through systematically and regularly monitoring its performance and the views of its stakeholders. Accounting is the measurement, processing, and communication of financial information about economic entities such as businesses and corporations. A socially responsible company will conduct a social audit to determine its social impact on its surrounding community, environment, and stakeholders. The financial and nonfinancial reporting process will be used to retrieve relevant information about the types of social audit company’s social impact.

Why Do Facilities Fail Audits?

Taking a continuous improvement approach shows that you value the partnership and want to succeed together. The main purpose of conducting a social audit is to present the report about the work process of an organization. The report is presented to designated management or shareholders, and sometimes reports are presented publicly. Conducting a social audit is important, as an organization not only impact the employees working in it or the consumers who consume products produced by them, but it also impacts the society and people of the local community. This can be learned as a process used to evaluate an entity’s involvement in social endeavors.

1. To be qualified as a social auditor, an individual must qualify for a certification program conducted by the National Institute of Securities Market (NISM) and hold a valid certificate.
2. Uncovering these practices and assessing the next steps with professional auditors is essential.
3. This audit can be performed by anyone with an interest in making sure initiatives are beneficial for all parties involved.

It is initially sent to the firm’s board of directors and senior management team. Social compliance audits are particularly relevant for organizations with a global supply chain. These businesses are also the most likely to encounter cultural differences in business practices and labor standards, which can be challenging to overcome with an ad-hoc approach. A social compliance audit, also called a social audit or an ethical audit, is a way to gain clarity into a business to verify that it is complying with socially responsible principles. Auditors usually conduct these audits on external facilities, such as production houses, factories, and farms or packing houses. Social compliance auditing is practiced mainly by retailers and manufacturers, also called purchasers or brands.

Undergoing independent audits and, crucially, making the outcomes available to community stakeholders, shows you’re ready to engage in productive dialogue. Social compliance audits are powerful tools in this highly-scrutinized environment. The Smartsheet platform makes it easy to plan, capture, manage, and report on work from anywhere, helping your team be more effective and get more done. Report on key metrics and get real-time visibility into work as it happens with roll-up reports, dashboards, and automated workflows built to keep your team connected and informed. On the other side, unscrupulous auditors may pressure a factory to pay a bribe in order to get them to overlook infractions or give a good report. “Consultants” may pressure a factory to hire their consulting services to pass an audit.

Documenting practices and behavior provides a baseline for compliance monitoring. Socially responsible behavior and audit reporting can also inform socially responsible investing (SRI) choices. Ideally, companies aim to strike a balance between profitability and social responsibility. A social audit is an internal examination of how a particular business is affecting society. The audit helps companies to determine if they’re meeting their objectives, which may include measurable goals and benchmarks.