Steps to Social Accounting
Social accounting is a method used by companies to investigate into whether the organization is working in accordance with its social, environmental and economic goals and values. Social accounting is similar to corporate social responsibility in which companies self-regulate their positive impact on society. To conduct a social accounting audit, an organization follows three steps: planning, accounting, and reporting and auditing.
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Preparing
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Before an audit, an organization learns about social accounting, such as the requirements necessary to complete an audit, guidelines for the management of the process and whether the company needs a social accounting audit. This preparation process often occurs during an orientation on the social accounting process.
Planning
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Planning is the first stage of a social accounting audit. In this stage, a company identifies and clarifies its objectives, aims, values and mission. The planning stage is a type of analysis of the organization, including its duties, why and how the organization carries out those duties, who works with the organization and who benefits from the organization. Identifying and clarifying these elements is essential for organizations to decide the scope of the social accounting audit.
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Accounting
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The accounting step is the second step in a social accounting audit. In this step, the organization decides on the focus of the audit and the long-term benefits of the audit. After making this decision, the company implements a social accounting process that gathers relevant information from key individuals, such as shareholders, about how well the organization is achieving its objectives, goals and aims. At the end of this step, the data from the audit is compiled and analyzed.
Reporting and Auditing
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The third and final step of a social accounting audit is the reporting and auditing step. In this step, the company compiles the collected data from the accounting step into a single document that serves as a draft for the social accounts. A social audit panel made up of people outside the organization then reviews the document and checks that the information was properly gathered and the report is accurate. After the panel approves the findings of the report, the organization makes the report available to key members, such as stockholders.
Benefits
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There are several benefits of a social accounting audit. These audits provide ongoing reports on the impact of the company and identify the areas that are working well and those that are not. Other benefits include feedback from individuals important to the organization and a single document that includes all information necessary to promote the company and apply for grants and funding.
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References
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