The Need for Stakeholder Councils in Social Audits
International Institute for Self-Governance; Sustainable Money Working Group
Social and Environmental Accounting, Vol. 15, No. 2, pp. 10-13, September 1995
The emerging discipline of social reporting accounting and auditing is compared with its financial counterparts and the need for different institutional arrangements are identified. An element of social accounting is to report on the ethical integrity of operations and governance of the entity. These concerns make it unacceptable for social auditors to be subject to the influence of the directors who are responsible for preparing the accounts. This inherent conflict of interest with financial auditors creates what is described in the accounting literature as an "audit expectation gap". An Audit Advisory Group representing key stakeholders was formed to assist in a pioneering 1994 social audit. This stakeholder council provided both information and verification for the social impact accounts. Because stakeholder councils are appointed and operate independently of management they also introduce a way to minimise the expectation gap of financial audits in either the private or public sector.
Number of Pages in PDF File: 12
JEL Classification: G3, L2, L3Accepted Paper Series
Date posted: August 7, 1995
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
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