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Social Audit

Definition of 'Social Audit'

A formal review of a companys endeavors in social responsibility. A social audit looks at factors such as a companys record of charitable giving, volunteer activity, energy use, transparency, work environment and worker pay and benefits to evaluate what kind of social and environmental impact a company is having in the locations where it operates. Social audits are optional--companies can choose whether to perform them and whether to release the results publicly or only use them internally. In the era of corporate social responsibility, where corporations are often expected not just to deliver value to consumers and shareholders but also to meet environmental and social standards deemed desirable by some vocal members of the general public, social audits can help companies create, improve and maintain a positive public relations image. Good public relations is key because the way a company is perceived will usually have an impact on its bottom line.
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. Definition by Prof. Ranjan Mohapatra of VISION foundation Social Audit is a process in which the details of the resources, financial and non-financial, used by the public

agencies for the development initiatives, are shared with the people, often through a public platform. It allows people to enforce transparency and accountability, thereby providing the ultimate users an opportunity to scrutinize the development initiatives. The main reason for the push for social audit is the huge disconnect between what the people need, what the government thinks it needs, and what is actually done.

Social audit is the final stage in the process known as social accounting and audit (SAA), which is a longestablished method of gathering information about performance against social, environmental and economic objectives. SAA is a form of social impact measurement, comparable with social return on investment (SROI); it has been suggested that the emphasis on the audit element (any social accounting work you do is then audited independently) sets the SAA process apart.[1] Currently the audit process can take place in three ways, as suggested by the Social Audit Network: [1]

Standard (and Standard Plus) is the highest level of audit. Both require an independent Social Audit Panel to be convened, including at least one qualified Social Auditor (who will usually chair the panel). The only difference between the two is that Standard Plus recognises that some (large or complex) organisations require the Social Auditor to visit before the Social Audit Panel. Audited Self-verification is an introductory and lower cost option. The organisation completes the social audit panel verification check-list itself which is reviewed by a social auditor who will also conduct a social audit trail. Self-audit uses the social audit panel verification checklist but the organisation does not have this independently audited. SAN suggests that such self-audits may be a "first stepping stone towards having social accounts independently audited."