USA: +1 415 256 4347 
Sign in
Question
Attached you will find everything you need for this order. Thanks in advance! |
| The four sources must be peer-reviewed journal articles |
Answer
This paper sets out to discuss the importance of social and environmental auditing in business. A social auditing refers to a formal review of the efforts being made by a company in social responsibility. It looks at the impact of business decisions on society. Environmental auditing on the other hand refers to formal reviews of a company’s activities and their impact on the environment. Although social and environmental auditing can pose some challenges for business, it is an important way of regulating business activities and should therefore be compulsory in all business enterprises (Murray et al., 2006).
Social auditing encourages businesses to be transparent in managing their activities. Formal audits encourage businesses to engage in accountability in all their dealings. Due to the frequency of audits, it becomes difficult for managers and employees to conduct underhand dealings in their businesses. Moreover, auditing enables the companies to be accountable for the actions they take. Accountability and transparency go a long way in advancing social interests due to a reduction in immoral acts such as corruption. A reduced occurrence of these acts leads to an improvement of supply of services to all people, and this is important in promoting social welfare.
Public goods, for instance air and water, are beneficial to all people. Maintaining these goods is important in not only preserving the environment but also in sustaining members of society. Carrying out social and environmental auditing constitutes a meaningful step towards maintaining these natural resources. Moreover, this kind of auditing leads to the development of ideas that can be used to improve the current status of the environment as well as social wellbeing (Gray, 2000).
Social and environmental auditing is also an excellent source of education for stakeholders in a company as well as other members of society. Stakeholders, for instance, are able to understand the operations of the company. This is a desirable situation since it promotes investor confidence owing to the accessibility of information on the company’s social and environmental performance.
Employment opportunities emerge in the process of carrying out these audits. Many employment opportunities emerge because the process requires the involvement of man professionals. This leads to an improvement in the welfare and general wellbeing of the communities whose members benefit from the employment opportunities. Lawyers are also employed to help in outlining future laws that are aimed at improving a company’s level of social and environmental accountability. Conducting social and environmental audits is therefore a means of making the society better through providing job opportunities.
In the context of social and environmental auditing, sustainability reports are a necessity. These reports are important in social and environmental auditing as they give relevant information to the stakeholders of the business. The information provided can be used in improving the company’s environmental performance. For instance, a company can change its method of disposing waste in as a result of the incriminating information contained in a sustainability report. This change can lead to an improvement in a company’s level of environmental conservation and a subsequent improvement in its corporate image (Murray et al., 2006).
Similarly, social auditing can lead to an improvement in a company’s public image. It makes social service providers aware of the community’s needs and the role companies can play in it. Moreover, it also provide information needed to improve effectiveness of programs provided by the social service providers (Lehman, 1999). This is important in improving the image of the company what at the same time enhancing community members’ social wellbeing. Public image determines the success of the business; a good public image will ensure that the business can maintain its position in the market against growing competition.
Social and environmental auditing also leads to growth of human resource of the business. A company that engages in programs that are beneficial to members of the local community can easily enhance its attractiveness to the local labor force. Thus, such a company can easily excel due to the overwhelming support of its activities by all stakeholders (Lehman, 1999).
Nevertheless, conducting social and environmental may also pose some challenges to business. The absence of a standardization is a particularly major challenge in social and environmental auditing. Developing countries differ from their less developed counterparts in terms of the way in which they engage in this kind of auditing. The establishment of a standard framework for conducting social and environmental auditing is long overdue. Additionally, societies differ in the way they address socio-environmental issues (Gray, 2000). A developing country may not prioritize social and environmental issues since there are other more pressing problems to be prioritized. Standardization is therefore important in social and environmental auditing. Moreover, due to differences among companies and countries, the expectations associated with an auditing process tend to vary. Standardization should be promoted in this regard as well to ensure uniformity of expectations and benchmarks.
Some businesses are by their very nature unsustainable in the long run. Mining, for example, may not be considered a sustainable undertaking. Therefore, such a business cannot provide constant benefits in the long run, for instance, employment. Moreover, a social and environment audit undertaken on the business in the current financial year cannot be compared with results of a past audit since mining activities usually occur in different places. Thus, it becomes difficult to analyze recommendations based on experiences accumulated over the years (Jenkins& Yakovleva, 2006). These challenges notwithstanding, social and environmental auditing should be made compulsory because it leads to an overall improvement in business performance, environmental protection, and social wellbeing. It also fosters the involvement of all stakeholders thereby helping to make companies do better. The persistent problems being experiences such as standardization, however, should first be addressed before businesses are compelled to adopt social and environmental auditing.
References
Gray, R (2000), ‘Current developments and trends in social and environmental auditing, reporting and attestation: A review and comment’, International Journal of Auditing, vol. 4, no. 3, pp. 247-268.
Jenkins, H & Yakovleva, N (2006), ‘Corporate social responsibility in the mining industry: Exploring trends in social and environmental disclosure’, Journal of cleaner production, vol. 14, no. 3, pp. 271-284.
Lehman, G (1999), ‘Disclosing new worlds: a role for social and environmental accounting and auditing’, Accounting, Organizations and society, vol. 24, no. 3, pp. 217-241.
Murray, A, Sinclair, D, Power, D & Gray, R (2006), ‘Do financial markets care about social and environmental disclosure? Further evidence and exploration from the UK.” Accounting’, Auditing & Accountability Journal, vol. 19, no. 2, pp. 228-255.
