THE SOCIAL AUDIT & SOCIAL AUDITOR AN EMERGING PROFESSION

“Social Audit is an independent evaluation of the performance of an organisation as it relates to the attainment of its social goals. It is an instrument of social accountability of an organisation. In other words, Social Audit may be defined as an in-depth scrutiny and analysis of the working of any public utility vis-à-vis its social relevance.

The Social Audit process is intended as a means for social engagement, transparency and information communication, leading to greater accountability of decision‐makers, representatives, managers and officials. The underlying ideas are directly linked to concepts of democracy and participation.”

SEBI is the regulator of Social Stock Exchanges. To establish the primacy of its social Intent, of the projects/programs/activities of social enterprises, SEBI came up with a new class of Auditors, the social auditors. A social auditor shall be registered with a self-regulatory organization (SRO)

Scope of Work for Social Auditors
The social auditor managing the audit programme should:
1. communicate the relevant parts of the audit programme, including the risks and opportunities involved, to relevant interested parties and inform them periodically of its progress, using established external and internal communication channels;
2. define objectives, scope and criteria for each individual audit;
3. The audit methods chosen for an audit depend on the defined audit objectives, scope and criteria, as well as duration and location.

Social Audit Network UK defines Social Auditor as “A person who chairs the social audit panel and manages the audit process at the end of each cycle, including the examination of the data and the sample checking to the source (the audit trail), and issuing the Social Audit Statement.

SEBI defines a social auditor as an individual registered with a self-regulatory organization (SRO) under ICAI or any other SRO notified 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.

Eligibility for Social Auditors:
A) Any Financial Auditor (As per section 139 of Companies Act, 2013)
OR
B) Individuals desirous of being Social auditors need to have at least 1 eligibility criterion listed below:
1. Post-graduates from universities recognized by the (UGC) with a minimum of 3 years of experience in Development sector or
2. Graduates from universities recognized by the UGC with 6 year of experience in the development sector, or
3. Cost and management accountants, or any other persons (like CS ) with suitable accreditation’s with a minimum of 6 years of experience in the development sector.
AND
4. Complete the NISM certificate course mentioned above. All Social Auditors will have to be empanelled under an SRO (Institute of Social Auditors of India) or any SRO formed as a separate Sustainability Directorate under the aegis of ICAI.

Social Audit Standard
The Social Audit Framework provides a social auditor guidance for conducting a social audit. The social audit framework is applicable from the date of its hosting on ICAI website. Social Audit Framework does not cover any elements of a financial audit or review, which may be covered by relevant auditing/review standards.

List of Social Audit Standards (SAS)

The SAS has sixteen thematic areas which is listed below
SAS 100: Eradicating hunger, poverty, malnutrition, and inequality.
SAS 200: Promoting health care (including mental health) and sanitation; and making available safe drinking water
SAS 300: Promoting education, employability, and livelihoods
SAS 400: Promoting gender equality, empowerment of Women and LGBTQIA+ communities
SAS 500: Ensuring environmental sustainability, addressing climate change including mitigation and adaptation, forest, and wildlife conservation
SAS 600: Protection of national heritage, art, and culture
SAS 700: Training to promote rural sports, nationally recognised sports, Paralympic sports, and Olympic sports
SAS 800: Supporting incubators of social enterprises
SAS 900: Supporting other platforms that strengthen the non-profit ecosystem in fundraising and capacity building
SAS 1000: Promoting livelihoods for rural and urban poor including enhancing income of small and marginal farmers and workers in the non-farm sector
SAS 1100: Slum area development, affordable housing, and other interventions to build sustainable and resilient cities
SAS 1200: Disaster management, including relief, rehabilitation, and reconstruction activities
SAS 1300: Promotion of financial inclusion
SAS 1400: Facilitating access to land and property assets for disadvantaged communities
SAS 1500: Bridging the digital divide in internet and mobile phone access, addressing issues of misinformation and data protection108
SAS 1600: Promoting welfare of migrants and displaced persons

Source: SEBI ICDR, NISM, Social Audit Standards of ICAI