AN ASSIGNMENT

ON

BUSINESS ENVIRONMENT
Social Audit

SUBMITTED TO
Md. Anisur Rahaman
Lecturer
Department of Management Studies
Faculty of Business Administration and Management

SUBMITTED BY

Shofiq Uddin Khan Md. Nazmul Alam Siddiqui

Roll No. 023 And Roll No. 024
Reg. No. 00682 Reg. No. 00565

Faculty of Business Administration and Management

SUBMITION DATE: October 14, 2008

PATUAKHALI SCIENCE AND TECHNOLOGY

UNIVERSITY

Page Social Audit

 Table of Contents

Social Audit: Chapter-35

Question No. Questions Page No.

01 What is social audit? What are its benefits? 1

02 What is organization for social audit? 2

03 Bring out the features and benefits of social 3

audits.

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 Chapter 35
Social audit
1. What is social audit? What are its benefits?

Answer to the question no.1

Social audit
A social audit is a systematic study and the evaluation of an
organization’s social performance, as distinguished from its
economic performance. It is concerned with the possible influence
on the social quality of life instead of the economic quality of life.
Social audit leads to a report on the social performance of a
business unit.

Benefits of social audit

The benefits of social audit are as follows:

Social audit enables the company to take close look at itself

and understand how far the company has lived up to its
social objectives.
Related to the first benefit is the fact that social audit
encourages greater concern for social performance
throughout the organization.
Social audit provides data for comparing effectiveness of the
different types of programs.
Social audit provides cost data on social programs so that
management can relate the data to budgets, available
resources, company objectives and projected benefits of
programs.
Social audit provides information for affective response to
external claimants that make demands on the organization.
News reporters, welfare organizations and variety of others

Page Social Audit

 want to know what a business is doing in areas of their
special interest, and a business needs to respond as
effectively as possible. The social audit shows a business
where it is vulnerable to public pressure and where its
strengths lie.

1. What is organization for social audit?

Answer to the question no.2

Organization for social audit

Social audit can be made by internal auditors, external
consultants or a combination of the two. The internal auditor has
the advantage of familiarity with the business, but his assessment
might be influenced by his loyalty to the company. A consultant
has the advantage of an auditors view but lacks familiarity with
the company and he is likely to ignore significant data. A
combination of the two is ideal for carrying on the audit of social
performance.

A closely related issue is whether or not to make public full or part

of the social performance report. The philosophy of any system
suggests that public interest is best served by public reporting;
however, the present state of the art with social audits is so
imprecise that public disclosure might do more harm than good.
Imprecise data and informed judgments are helpful for internal
decision making, but they probably are not concrete enough to
satisfy the public. Further, there are so many differences of
opinion that almost anyone could find reasons for criticizing a
firm’s performance, and dissident groups could expand some
detail far beyond its importance. The result could be that social
conflict would increase and firms would withdraw from social

Page Social Audit

programs in order to avoid reporting them, thus defeating the
original purposes of social reporting.

2. Bring out the features and benefits of social audits.

Answer to the question no.3

Features of social audits

The nature of social audit can be made clearer if the features
would be bringing out its salient.

The areas for social audit include any activity which has a
significant social impact, such as activities affecting
environmental quality, consumerism, opportunities for women
and other disadvantaged people in society and similar others.

The second feature about social audit is that it can determine

only what an organization is doing in social areas, not the amount
of social good that results from these activities. It is a process
audit rather than an audit for results.

Thirdly, social performance is difficult to audit because most of

the results of social activities occur beyond the company’s gate
and the company has no means of securing data on the results.

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Even if data are available, it is difficult to establish how many of
them have occurred due to company’s actions.

Finally, social audits use both qualitative and quantitative data.

The pressures to use quantitative approach are strong because of
its respectability and apparent objectivity. Quantitative data are
precise and convincing, but in the area of social philosophy and
human values, it is misleading to report only in quantitative
terms. They can communicate only a part of the total situation, a
part of the whole truth. Both quantitative and qualitative data are
essential. Normally, a firm uses as much quantitative data as
possible, and then supplements it with qualitative data.

Benefits of social audit

The benefits of social audit are as follows:

Social audit enables the company to take close look at itself

and understand how far the company has lived up to its
social objectives.
Related to the first benefit is the fact that social audit
encourages greater concern for social performance
throughout the organization.
Social audit provides data for comparing effectiveness of the
different types of programs.
Social audit provides cost data on social programs so that
management can relate the data to budgets, available
resources, company objectives and projected benefits of
programs.
Social audit provides information for affective response to
external claimants that make demands on the organization.
News reporters, welfare organizations and variety of others
want to know what a business is doing in areas of their

Page Social Audit

 special interest, and a business needs to respond as
effectively as possible. The social audit shows a business
where it is vulnerable to public pressure and where its
strengths lie.

Page Social Audit