|
Martynyuk Veronika
candidate of
sciences,
Popovych Halina
Bukovina state
university of finance and economics,
Chernivtsi
SOCIAL COMPLIANCE AUDIT FRAMING
Social
audit as a term was used as far back as the 1950s. At present a great number of scientists (Andryuschenko A.,
Balakyryeva O., Ischenko O., Kasperovytch O., Masuryk O., Polyakova S., Syryi
E. et alta [1;
2; 3; 4; 5]) focus their research on this vital sphere of external auditing.
The
topicality of this article is that in the era of corporate social
responsibility, where corporations are often expected not just to deliver value
to consumers and shareholders but also to meet environmental and social
standards deemed desirable by some vocal members of the general public, social
audits can help companies create, improve and maintain a positive public
relations image.
Social audit is a way of measuring, understanding, reporting and
ultimately improving an organization’s social and ethical performance [5]. 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 audit verifies how programs and services are
being carried out, with the goal of making them better and more reflective of
social, environmental, and community objectives. Social audit involves a
systematic evaluation of public records and user feedback. It is intended to
help users understand and assess the strengths and weaknesses, successes and
failures of a programme or service, with an aim to make improvements.
Social
Audit is a formal review of a
company’s endeavors in social responsibility. Social audit looks at factors
such as a company’s record of charitable giving, volunteer activity, energy
use, transparency, work environment and worker pay as well as benefits to
evaluate what kind of social and environmental impact a company is having in
the locations where it operates. Social audits are optional – companies can
choose whether to perform them and whether to release the results publicly or
only use them internally.
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.
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 [7].
Social audits can take different forms and cover a range of actors and
practices. They can be undertaken individually or jointly by government, civil
society and/or community-level actors. In the context of state institutions,
social audits supplement conventional financial audits to help government
departments and public agencies compare their overall performance, as perceived
by the public, with their stated core values and objectives.
Depending upon available resources, social audits can be of varying size
and scope, ranging from comprehensive national audits to localized community
audits. Social audits are sometimes undertaken as a one-off event but are
usually more effective when planned as an ongoing process, undertaken at
regular intervals. Social audits use participatory techniques to involve all
relevant stakeholders (especially traditionally marginalized or underserved
groups) in collecting and analyzing evidence, providing feedback, and
recommending changes where necessary.
The
main drivers in social compliance auditing are retailers and brand
manufacturers. This process allows them to have control over their supply
chains and ensure they are working with socially responsible and quality
companies [6].
Factories are assessed against a list of nine standards (child labor,
forced labor, health and safety, freedom of association, discrimination etc.)
as well as customer specified requirements to ensure fair and ethical
production of goods. The social audit addresses customer concerns regarding
human rights in the workplace.
A social compliance audit verifies data collected to determine whether
an organization is meeting standards it set for social and ethical performance
[6]. The social compliance evaluation also assesses the impact of the
organization on communities and others involved with the organization, like
employees, consumers, clients and suppliers. Ideally, the social audit process
is: inclusive, participatory, thorough, verifiable, transparent, and dedicated
to making the project or service better.
To make the social compliance audit process effective one should take the
following steps:
1)
Select a team to perform the audit. For maximum effectiveness,
select experienced and highly detail-oriented individuals. Appoint the most
qualified candidate to oversee the team.
2)
Segregate different areas of the company to audit.
3)
Obtain copies of departmental procedures for each area
you intend to audit.
4)
Review all reports pertaining to production and
volume. Use this to determine the sample size to audit. Adjust the size of your
audit team accordingly.
5)
Determine a timeline.
6)
Create a checklist of items each auditor should
observe when reviewing a file.
7)
Develop a system for reporting your findings and
recommendations. Ensure that all information is arranged in a logical and
easily understood manner.
An effective compliance audit process ensures your company is following
regulations and avoiding sanctions. By developing and enacting an effective
compliance audit process, the company accomplishes two things. First, it gives
itself the best chance to catch compliance issues before they become a problem.
Second, it shows the external examiners that the company is doing everything in
its power to adhere to the required regulations.
Auditors
[1; 2; 5; 7] state that some potential
problems remain: a) Reporting organization can deliberately limit audit
scope in order to avoid controversies; b) Process can be managed internally to
the disadvantage of some external stakeholders; c) Some significant
stakeholders may be omitted; d) Organization may use arbitrary or inappropriate
indicators to evaluate outcomes; e) The standards, independence and honesty of
the auditor may be open to question.
Therefore, we can draw the conclusion that the key
factors for successful Social Compliance Audit are: Level of
information shared with and involvement of stakeholders, particularly of the
rural poor, women, and other marginalized sections; Commitment, seriousness and
clear responsibilities for follow-up actions by elected members of the company; Involvement of key facilitators in the process.
References
1. Волков С. Соціальний аудит як механізм оптимізації управління розвитком соціальної сфери / С. Волков, А. Андрющенко // Профспілки України. – 2008. – № 4. – С. 10–13.
2. Балакірєва О. М. Соціально відповідальний бізнес в Україні: поняття та основні чинники / О. М. Балакірєва, Ю. М. Галустян
// Український соціум. – 2007. – № 5-6. – С. 14–27.
3. Мазурик О.В.
Соціальний аудит в системі соціального партнерства: механізми оптимізації /
О.В. Мазурик // Економіка. – 2009. – № 15. – C. 137-144.
4. Полякова С.В. Соціальний аудит як технологія управління
соціальними процесами / Полякова
С. В. // Економіка розвитку. – 2011. – № 1(57). – C. 46-49.
| 
