THE BHOPAL SCHOOL OF SOCIAL SCIENCES

Class : B.Com Subject : Auditing

Unit : 5 Module : 1

SOCIAL AND ENVIRONMENT AUDIT

SOCIAL AUDIT
Social auditing is a process that allows for the evaluation and assessment of an organization's
social performance and impact on various stakeholders. It is a way to measure, understand, and
improve an organization’s social and ethical performance.

It is a way of measuring, understanding, reporting and ultimately improving an organization’s

social and ethical performance. A social audit helps to narrow gaps between vision/goal and
reality, between efficiency and effectiveness. It is a technique to understand, measure, verify,
report on and to improve the social performance of the organization.

Social auditing creates an impact upon governance. It values the voice of stakeholders,
including marginalized/poor groups whose voices are rarely heard. Social auditing is taken up
for the purpose of enhancing local governance, particularly for strengthening accountability
and transparency in local bodies.

The key difference between development and social audit is that a social audit focuses on the
neglected issue of social impacts, while a development audit has a broader focus including
environment and economic issues, such as the efficiency of a project or programme.

Objectives of social audit

1. Assessing the physical and financial gaps between needs and resources available for
local development.
2. Creating awareness among beneficiaries and providers of local social and productive
services.
3. Increasing efficacy and effectiveness of local development programmes.
4. Scrutiny of various policy decisions, keeping in view stakeholder interests and
priorities, particularly of rural poor.
5. Estimation of the opportunity cost for stakeholders of not getting timely access to public
services.

Significance of social auditing:

 Transparency and Accountability: Social auditing promotes transparency and
accountability in the functioning of organizations, particularly those engaged in social
and development activities. The Rajasthan government has established a Social and

*Edited & Compiled for Students by:

Dr. Ramandeep Kaur
Assistant Professor
Department of Commerce
The Bhopal School of Social Sciences
 THE BHOPAL SCHOOL OF SOCIAL SCIENCES
Class : B.Com Subject : Auditing
Unit : 5 Module : 1

Performance Audit Authority (SPAA) for the first time to enhance accountability in the
performance of government projects and programmes.

 Reduces Corruption: The people of Dungarpur district of Rajasthan and Anantapur

district of Andhra Pradesh have collectively organized social audits to prevent mass
corruption under the Mahatma Gandhi National Rural Employment Guarantee Act
(MGNREGA).

 Stakeholder Engagement: Social auditing involves the participation of various

stakeholders and provides an opportunity for their voices to be heard and considered in
decision-making processes.

 Impact Assessment: Through social auditing, organizations can assess and measure
their impact on different social, economic, and environmental parameters. It helps in
determining whether the intended outcomes are being achieved and facilitates
evidence-based decision-making for future interventions.

 Enhancing Public Trust: By voluntarily undergoing social audits, organizations

demonstrate their commitment to transparency, accountability, and social
responsibility, thereby fostering public trust and confidence in their operations.

 Policy Advocacy: Social auditing generates valuable data and insights about social
issues, challenges, and successes. This information can be utilized to advocate for
policy changes, reforms, and improvements in various sectors, including education,
healthcare, environment, and poverty alleviation.

 Learning and Continuous Improvement: Social auditing encourages organizations

to reflect on their practices, learn from past experiences, and continuously improve their
performance. It provides a platform for internal and external stakeholders to exchange
knowledge and best practices, leading to enhanced effectiveness and efficiency.

 Inclusive Development: Social auditing promotes inclusive development by ensuring

that the needs and concerns of marginalized and vulnerable communities are addressed.

*Edited & Compiled for Students by:

Dr. Ramandeep Kaur
Assistant Professor
Department of Commerce
The Bhopal School of Social Sciences
 THE BHOPAL SCHOOL OF SOCIAL SCIENCES
Class : B.Com Subject : Auditing
Unit : 5 Module : 1

ENVIRONMENT AUDIT

An environmental Audit provides an assessment of the environmental performance of a

business or organization. The audit reveals details about the activities of a company and its
compliance with environmental regulations. Audit information is presented to the management
team and employees.

An environmental audit evaluates and quantifies the environmental performance. It identifies

compliance problems or management system implementation issues.
It is essentially an environmental management tool for measuring the effects of certain
activities on the environment against set criteria or standards.
Environmental auditing is carried out when a development is already in place, and is used to
check on existing practices, assessing the environmental effects of current activities (ex post).
Environmental auditing therefore provides a 'snap-shot' of looking at what is happening at that
point in time in an organisation.
Thus, it refers to checking systems and procedures against standards or regulations, but it is
often used to cover the gathering and evaluation of any data with environmental relevance.
Principle areas of Environmental Auditing
a. Material Audit- It mainly concentrates on the use of different raw material or natural use of
resources, cost per unit, process-wise consumption, wastage etc. Conservation of raw materials,
scientific storage & and reuse of wastage materials are taken into consideration.
b. Energy Audit- It examines the consumption of various forms of energy in different
processes in any industry or organization. The main aim of this audit is the minimization, and
elimination of avoidable losses of valuable energy and their conservation.
c. Water Audit- Consumption of water at different sources is noted. It also concentrates on
the reuse and recycling of water, evaluation of raw water intake, balancing of water table and
other sources.
d. Health and Safety Audit - Workers and employee are the basic need of industry. Health
and safety of those is well considered in audit. Proper disposal of toxic and hazardous waste,
fire prevention measures etc. is evaluated.
e. Waste Audit - It covers the qualitative and quantities evaluation of waste generated from
industries.
g. Engineering Audit - Use of advanced technology that will cover the suitable processes and
engineering applications.

*Edited & Compiled for Students by:

Dr. Ramandeep Kaur
Assistant Professor
Department of Commerce
The Bhopal School of Social Sciences
 THE BHOPAL SCHOOL OF SOCIAL SCIENCES
Class : B.Com Subject : Auditing
Unit : 5 Module : 1

References
1. https://www.fao.org/3/ad346e/ad346e09.htm#:~:text=What%20is%20a%20social%20
audit,reality%2C%20between%20efficiency%20and%20effectiveness.
2. https://theiashub.com/free-resources/mains-marks-booster/social-audit
3. https://www.corpseed.com/service/environmental-audit

*Edited & Compiled for Students by:

Dr. Ramandeep Kaur
Assistant Professor
Department of Commerce
The Bhopal School of Social Sciences
 THE BHOPAL SCHOOL OF SOCIAL SCIENCES
Class : B.Com Subject : Auditing
Unit : 5 Module : 1

*Edited & Compiled for Students by:

Dr. Ramandeep Kaur
Assistant Professor
Department of Commerce
The Bhopal School of Social Sciences