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So, let me give you some examples to make you understand the social audit meaning.

One example of a real-life social audit is the Fair Labor Association (FLA) audit of a factory in China that produced clothing for a number of major clothing brands. The FLA is an independent organization that conducts social audits of factories around the world to ensure that they are in compliance with international labour standards.

social audit meaning

The audit found that the factory was in violation of a number of labour standards, including excessive overtime, lack of proper safety equipment, and failure to provide adequate training to workers. The audit report also found that the factory had not properly implemented the FLA’s Code of Conduct, which sets standards for worker rights, health and safety, and environmental protection.

Introduction to Social Audit Meaning

The audit is the examination or inspection of all the books of accounts of a firm, organisation, or company by an auditor. The audit is followed by actual physical checking of the inventories to make sure that all departments are following the documented system of recording the transactions. Auditing is done to ascertain the accuracy and authenticity of the financial statements of the firm, company, or organisation. In this article, we will be looking briefly at the Social Audit.

What is a Social Audit?

A Social Audit is a formal evaluation of a company’s procedures, code of conduct, and endeavours with respect to Corporate Social Responsibility (CSR) and social impact. It portrays how well the company is achieving its goals. Many companies make goals and objectives with regards to CSR initiatives, and the same can be reviewed with the help of Social Audits. Social audits have a strong impact and influence on the public relations image of the companies as these companies strive to maintain a balance between their social responsibilities. By doing this, they provide value to their investors and shareholders.

Understanding Social Audits Meaning

Corporate social responsibility is increasing rapidly in today’s business world. It has become necessary for corporations to maintain a delicate balance between responsibility to their shareholders and investors. They have to make certain objectives with regards to making strong social impacts. CSR is often integrated into many other areas of a company’s service lines. A social audit determines how a particular business affects society. The audit helps companies to determine if they are meeting their objectives. The audits also serve as a way for businesses to check whether their actions are affecting the public image in a positive or a negative way. This can help the companies in improving their public image and public relations. This is a crucial aspect for many larger publicly traded corporations as the public perception is tied to their earnings and share price.

History

Social audits are a relatively new concept in the business world. The first social audit was carried out in Sweden by work-life researchers at the centre for Swedish Working Life, John Fry and Ulla Ressner. The audit was published in Sweden in the year 1988 by Allmäna Förlaget under the title “Social Revision av ett Ämbetsverk” [1]. The three-year study of Sweden’s central bureaucracy relied in interviews and questionnaires with many of the organisation’s employees from all designations. Its main focus was on the senior management and junior staff. They evaluated the objectives for the company established beforehand. From the responses, the researchers were able to get a better understanding of the effectiveness of the organization and make recommendations for improvement as a result of the social audit.

Items evaluated

Social Audits takes into consideration many aspects within an organization to measure, report, and improve the organisation’s performance. Some of the items examined by social audits are:

  • Record of charitable contributions
  • Volunteer events
  • Transparency within the organisation
  • Work environment
  • Salaries and wages of the employees
  • Community initiatives and activities
  • Diversity in the workplace
  • Accounting and financial transparency
  • Non-discriminatory practices
  • Charitable giving
  • Community development and financial contributions

It should be duly noted that there are no specific standards or rules to follow, and organisations typically have a lot of flexibility when it comes to implementing social audits. Social audits are not necessarily made available to the public. It can also be for the internal management to further improve the company’s social efforts.

Use of Social Audits

Social audits do not have a government body which means that the organisation can freely decide whether to share the finding of the social audits to its shareholders and investors. The results of the audits are extremely beneficial to the organisation. They help understand the strengths and weaknesses of the organisation. Social audits also help the organisation to evaluate their social initiatives. This strongly influences public image and relations. 

Social Audit: Apple Computers

One example of a social audit of Apple Inc. is the Fair Labor Association (FLA) audit of Foxconn, a major supplier of Apple products in China. In 2012, the FLA conducted an independent investigation of working conditions at Foxconn’s factories, in response to reports of poor working conditions and labor rights violations.

The FLA audit found that Foxconn workers were working excessive overtime and were not being properly compensated for it. It also found that Foxconn had not properly implemented a number of labor standards, including those related to health and safety, worker rights, and environmental protection.

In response to the findings, Apple and Foxconn agreed to take a number of steps to address the issues identified in the audit. These included reducing working hours, increasing wages, and providing workers with proper safety equipment. Foxconn also agreed to implement a monitoring and reporting system to ensure that it remained in compliance with the FLA’s Code of Conduct.

This social audit case study shows how Apple and its supplier Foxconn have taken steps to address the issues identified in the social audit and improve its social and ethical performance. It also highlights how companies like Apple can use social audits as a management tool to monitor and improve the working conditions of their suppliers and ensure compliance with international labour standards.