ICSI announced Social Audit Standards to conduct Social Audit of Social Enterprise

The Institute of Company Secretaries of India(ICSI) has announced Social Audit Standards formulated for the purpose of providing guidance to conduct Social Audit of a Social Enterprise engaged in any of the activities as enumerated under Regulation 292E(2) (a) of SEBI (Issue of Capital and Disclosure Requirements), Regulations, 2018.

Social Audit is a novel concept & its impartial systematic process allows stakeholders to assess the impact made by Social Enterprise through its intervention, program or projects & identify gap between desired object & actual impact made by Social Enterprise during reporting period. It also aims to aid regulators for effective implementation of applicable laws, rules & regulation. The Social Audit must be performed by a Social Auditor & must comply with issued social standards.

These procedures are designed to identify impacts made by the Social Enterprise on target area during the reporting period. It helps the stakeholders in understanding the project and its impact on target section, challenges and mitigation measures. The methodology adopted for this Social Audit is both qualitative and quantitative data evaluation.

Social Audit Standards are written in the context of assessment of impact by an independent Social Auditor. The objective of Social Audit is to enable the auditor to express an opinion whether the activity, intervention, program or projects implemented by the Social Enterprise in all material respects are in accordance with the fund-raising document and other applicable laws and regulations.

Objectives

The main object of Social Audit is to ascertain the impact made by the Social Enterprise through its activities, intervention, programs or projects implemented during the reporting period. It will also analyse whether the implemented activities, intervention, programs or projects has addressed the challenges set at the implementation stage or those mentioned in the fund-raising documents. The impact report aims to highlight the positive impact made to the target area, unintended negative impact and gap between desired object and actual impact made by the Social Enterprise during the reporting period. The main objects of Social Audit are as follows:

• Assessing the impact made by the Social Enterprise through implementation of activities, intervention, programs or projects;
• Verifying the authenticity and validity of implementation of projects;
• To identify and report the gap between desired object and actual impact made by the Social Enterprise;
• Assessing the nature, intensity and duration of impact of the project;
• Evaluating the cost and efficiency of the projects/ interventions being carried out by the Social Enterprise;
• Evaluating the unintended effects and how to use the experience from the running projects to improve the design of future projects;
• Verifying whether all the statutory requirements are fulfilled or not.

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