What is Social Audit

Social Audits
The Social Responsibility Audit
The concept of social accounting encompasses the process of attempting to measure the value of intangible assets such as intellectual capital, customer and vendor loyalty, employee satisfaction and creative “synergy”, and community support.
Beyond the impact of financial statements as a tool for assessing corporate performance, the social responsibility audit report is designed to integrate the impact of intangible assets on stakeholders by providing them with reliable social performance achievements contrasted against generally accepted social responsibility criteria.
The technology of assessing corporate performance, beyond the financial statements, requires a multi-disciplinary audit team including accountants, behavioral science practitioners, attorneys and engineers.
Within the past ten years, greater focus has been leveled at corporate performance in “green” terms by the Generation of the Sixties whose ethical foundations hold corporate behavior to higher standards than the “Aerospace” Generation. The so called Baby Boomers, now wealthy and seasoned, continue to assert core ethical values as a paradigm for daily behavior.
Consequently, unprecedented private and public funds are being devoted to projects perceived as "”socially responsible”...all this without a clearly defined body of criteria for what constitutes such behavior and without much accountability for those self-interested organizations holding themselves out as “socially responsible” even for organizations which have traditionally been viewed in such terms.
The purpose of the Social Responsibility Audit is to validate corporate performance against generally accepted criteria and report to the stakeholders the extent to which the auditee organization “walks its talk”.
Competence
• The engagement shall be performed by a practitioner having adequate technical training and proficiency in the attest function.
• The engagement shall be performed by a practitioner having adequate knowledge in the subject matter of the assertion.
• The practitioner shall perform an engagement only if he or she has reason to believe that the following two conditions exist:
o The assertion is capable of evaluation against reasonable criteria that either have been established by a recognized body or are stated in the presentation of the assertion in a sufficiently clear and comprehensive manner for a knowledgeable reader to be able to understand them.
o The assertion is capable of reasonably consistent estimation or measurement using such criteria.
Independence
• In all matters relating to the attest engagement, an independence in mental attitude shall be maintained by the practitioner who shall not have participated in the development of the assertion.
Due Care
• Due professional care shall be exercised in the performance of the engagement.
Planning
• The work shall be adequately planned and assistants, if any, shall be properly supervised.
Control Structure
• A sufficient understanding of the communications and control structures is to be obtained to plan the audit and to determine the nature, timing, and extent of tests to be performed.
Evidence
• Sufficient evidence shall be obtained to provide a reasonable basis for the conclusion that is expressed in the report.
Standards of Reporting
• The report shall identify the assertion being reported on and state the character of the engagement.
• The report shall state the practitioner’s conclusion about whether the assertion is presented in conformity with the established or stated criteria against which it was measured.
• The report shall state all of the practitioner’s significant reservations about the engagement and the presentation of the assertion.
• The report on an engagement to evaluate an assertion that has been prepared in conformity with agreed-upon criteria or on an engagement to apply agreed-upon procedures should contain a statement limiting its use to the parties who have agreed upon such criteria or procedures.