Social Audit

What is Social Audit?

Social audit can be defined as a mechanism that is taken into use for the purpose of understanding, measuring, reporting and enhancing the overall ethical performance of an organization and for this purpose the involvement of its stakeholders such as its clients, employees, customers, creditors, suppliers, vendors, shareholders, and society is very important.


This can be learned as a process that is used to evaluate an entity’s involvement in social endeavors. In other words, social audit aims to assess the type of social as well as environmental influence an entity has on the society and enable the local social service providers aware of the ongoing needs of the local community.

Social-Audit (Main Image)

You are free to use this image on your website, templates etc, Please provide us with an attribution linkHow to Provide Attribution?Article Link to be Hyperlinked
For eg:
Source: Social Audit (

Objectives of Social Audit

The objectives of Social audit can be classified into two categories which are mentioned below:

Objectives of Social Audit

You are free to use this image on your website, templates etc, Please provide us with an attribution linkHow to Provide Attribution?Article Link to be Hyperlinked
For eg:
Source: Social Audit (

#1 – Principal Objectives

These are concerned with the payment of fair and timely dividendsDividendsDividends refer to the portion of business earnings paid to the shareholders as gratitude for investing in the company’s more to the stockholdersStockholdersA stockholder is a person, company, or institution who owns one or more shares of a company. They are the company's owners, but their liability is limited to the value of their more, fair salaries, and wages to the employers and laborers. Also, fair, reasonable, and best possible prices offered to clients and customers, and the extension, development as well as enhancement of an entity’s business and allowing it to become financially independent.

#2 – Secondary Objectives

These are concerned with factors like creating a provision of incentives and bonuses for the employees and also assisting in promoting and encouraging the amenities of the local community. Boosting the development of the industry in which the company operates. And promoting research and developmentResearch And DevelopmentResearch and Development is an actual pre-planned investigation to gain new scientific or technical knowledge that can be converted into a scheme or formulation for manufacturing/supply/trading, resulting in a business more framework in the techniques used by the company as well as the industry.

#3 – General Objectives

The other and general objectives are to put an end on irregular activities, to reduce or diminish the economic as well as social gaps. Also, to evaluate conditions in which the employees work, to evaluate the impact of a company’s business operationsBusiness OperationsBusiness operations refer to all those activities that the employees undertake within an organizational setup daily to produce goods and services for accomplishing the company's goals like profit more on the environment and the local community. To formulate the initiatives that are taken to develop the local communities, and so on.

If you want to learn more about Auditing, you may consider taking courses offered by Coursera

  1. Auditing I: Conceptual Foundations of Auditing
  2. Auditing II: The Practice of Auditing

Process of Social Audit

The process of social audit involves the following steps:

  1. Initiating

    In this phase, the users shall need to define a clear objective and evaluate what do they want to audit, establish an individual who will be responsible for the overall process of audit, and accordingly secure funding.

  2. Planning

    In this phase, the users shall need to select a strategy and identify the stakeholders of the company and understand the decision process of the government and then, after, collaborate various approaches as well as practices, and accordingly engage the counterparts of the government.

  3. Implementing

    In this phase, the users will need to perform the audit function, source as well as analyze all the information, disseminate the results and the information, and then after, consider factors like sustainability and institutionalization.

  4. Closing

    In this phase, the users will simply need to follow up to ensure that the social audit is successful.

Social Audit Examples

  • ABC Limited is a company that purchases and sells household items, and it claims to make donations in the form of offering groceries to needy families. In this case, it can be performed by thoroughly evaluating charity records, and such other documents to check and confirm the validity of the claims that are made by ABC Limited.
  • After the research, it was found that ABC is doing a clean and green business and not causing any harm to the environment and implements the use of only eco-friendly procedures. This assessment report will be updated on behalf of the company on its website. This report will be of great significance for investors who are planning to invest in the shares of ABC Limited.


It has a vast need in today’s world, where every business player is facing tough and neck to neck competition. Each business unit is not just connected with the internal stakeholders but is also primarily connected to the external public too. Established companies are supposedly more persuasive and make use of enormous resources. This power can sometimes be misused, and the result of these activities can create a significant impact on the local community or society and environment at large. To monitor and regulate the activities of the companies from time to time. Motivate the company to act in the best interest of society and the environment.


It is highly essential as it helps the local communities with planning function, supports democracy, encourages the involvement of the communities, benefits not just individuals. Still, their families too assist the human resource developmentHuman Resource DevelopmentThe Full Form of HRD is Human Resource Development. HRD is a set of planned processes aimed at enhancing the workforce's knowledge, skill, personal development, well-being, and lifelong learning and training at the individual, organizational, regional, and national levels in order to improve the organization's effectiveness and workplace more and growth, enhances the image of the company in the eyes of the investors, promotes decision making, and so on.


  • It helps the local community in planning
  • It supports the democracy function in the community
  • It promotes the active involvement of the local community;
  • It helps in enhancing the image of an organization in the eyes of the internal as well as the external public;
  • It assists in the growth and development of human resources.


  • It can be highly complicated, and time taking for the users.
  • It does not offer any sort of transparent methodology.
  • It defines scope might get difficult for the users.
  • It tends to be subjective is another reason why the same is highly discouraged.
  • It lacks qualified trainers.
  • The practical utility in social audit is minimal.


It is the need of the hour. It helps in monitoring unethical practices of the companies, and raises social consciousness and accountability and thereby offers a systematic evaluation and measures the social performance of companies at regular intervals. It acts as a guide and encourages the participation of the local community, and helps in the development of social capital and human resources.

Recommended Articles

This article has been a guide to What is Social Audit & its Meaning. Here we discuss the objectives of social audit, process, and needs along with importance, examples, advantages, and disadvantages. You can learn more about from the following articles –

Reader Interactions

Leave a Reply

Your email address will not be published. Required fields are marked *