The ICAI has published the final set of its “Social Audit Standards (SASs)” along with the framework. Social Auditors are required to follow these 16 SASs in the social audits commencing on or after January 14, 2023.
The SASs apply whenever an independent social audit of a social enterprise is carried out. Social enterprise may be ‘for profit’ or ‘not for profit’ organisation. The SASs may also have application, as appropriate, to other related functions of social auditors.
While discharging their social responsibility, it is the duty of social auditors to ensure that the SASs are followed. If for any reason a social auditor is not able to perform a social audit in accordance with the SASs, his report should draw attention to the material departures therefrom.
Further, compliance with SASs is mandatory requirements for social auditors while carrying out social audits for social enterprises listed on social stock exchange.
ICAI Announcement dt. 14/01/2023: Social Audit Standards (SASs)
ICAI Announcement dt. 04/02/2023: Framework for Social Audit Standards (SASs)
ICAI Announcement dt. 10/02/2023: A Primer on the Concept of Social Stock Exchange
List of 16 Social Audit Standards (SASs) of ICAI)
The Institute of Chartered Accountants of India (ICAI) has published sixteen Social Audit Standards (SASs), which correspond to the sixteen subject areas specified by SEBI and must be complied with by social auditors when it comes to impact reporting for social audit engagements. When carrying out an impact assessment, one must adhere to these standards, which lay out the minimal conditions that must be met. Additional requirements could be outlined in the form of laws or regulations, and they should be adhered to whenever they come into play. Following is the list of 16 SASs published by ICAI in January 2023 edition:
i) SAS 100: Eradicating hunger, poverty, malnutrition and inequality:
ii) SAS 200: Promoting health care (including mental health) and sanitation; and making available safe drinking water
iii) SAS 300: Promoting education, employability and livelihoods
iv) SAS 400: Promoting gender equality, empowerment of Women and LGBTQIA+ communities
v) SAS 500: Ensuring environmental sustainability, addressing climate change including mitigation and adaptation, forest and wildlife conservation
vi) SAS 600: Protection of national heritage, art and culture
vii) SAS 700: Training to promote rural sports, nationally recognised sports, Paralympic sports and Olympic sports
viii) SAS 800: Supporting incubators of social enterprises
ix) SAS 900: Supporting other platforms that strengthen the non-profit ecosystem in fundraising and capacity building
x) SAS 1000: Promoting livelihoods for rural and urban poor including enhancing income of small and marginal farmers and workers in the non-farm sector
xi) SAS 1100: Slum area development, affordable housing, and other interventions to build sustainable and resilient cities
xii) SAS 1200: Disaster management, including relief, rehabilitation and reconstruction activities
xiii) SAS 1300: Promotion of financial inclusion
xiv) SAS 1400: Facilitating access to land and property assets for disadvantaged communities
xv) SAS 1500: Bridging the digital divide in internet and mobile phone access, addressing issues of misinformation and data protection
xvi) SAS 1600: Promoting welfare of migrants and displaced persons
SEBI notifies Regulations for Fund Raising by Social Enterprises at Social Stock Exchange
SEBI notifies the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) (Third Amendment) Regulations, 2022, to insert a new Chapter X-A on “Social Stock Exchange” in the 2018 Regulations, to regulate Fund Raising Activities of the Social Enterprises.
According to the SEBI Notification, the ICAI has been given the duty of serving as the “Self-Regulatory Organization (SRO)” for the purpose of regulating the field of social auditors.
India’s Social Stock Exchange (SSE) is innovative. The new SEBI circular defining the process for Indian NPOs to list on an SSE requires a paradigm shift in how NPOs work, their governance, and their legal compliance. The SSE platform allows Social Enterprises (SEs) to access public funding from institutional and non-institutional investors.
Access to public markets requires greater transparency, tougher disclosure standards, independent impact evaluations, and accountability to investors for using money according to stated intentions. SEBI has introduced significant investor protections in the SSE framework, such as requiring NPOs to have a three-year track record. These rules open a new conduit for SEs to obtain finance.
SEBI Notification dt. 25/07/2022: Regulations for Fund Raising by Social Enterprises – New Chapter X-A on ‘Social Stock Exchange’ inserted in Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations 2018
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ICAI forms ‘Institute of Social Auditors of India (ISAI)’, an SRO
When it came time to put the finishing touches on this compendium of social audit standards, it appears that the ICAI committed a mistake. In the draft/original version of these standards, the Document contained Sections I (Preface) and II (Framework of Social Audit Standards), but in the final form, those sections were removed. This compendium is missing a significant amount of information that is necessary for its introduction and indexing. I really hope that the ICAI would review it and bring it up to date as soon as they possibly can. (Note: comment is based on pages referred in the post and content available therein as on 18/01/2023)
Regarding the booklet published by the ICAI on January 14, 2023 and named “Social Audit Standards (SAS),” Bipin Dass has drawn attention, and with good reason, to the obvious mistakes that have been stated before. I would like to further augment the above comment with the feedback that each SAS has a mention to be read in conjunction with the “Preface to the Social Audit Standards” and “Framework for the Social Audit Standards” issued by the ICAI. On the other hand, the same are not available anywhere else other than in the exposure draft issued by the ICAI earlier. Is there any logic behind the ICAI’s decision to make compliance mandatory even before publishing the Social Audit Standards in their entirety, with the framework included?
Following the publication of ‘Social Audit Standards (SASs) by ICAI, the ICSI has also published an exposure draft of the “Social Audit Standards (SASs)” on January 18, 2023 in order to solicit feedback from relevant stakeholders.
When it comes to auditing social enterprises or companies, the question that needs to be answered is: which “standards” should be adhered to?
Only SAS those are approved by SEBI for NPO audit by Social Auditors to be adhered, this is what I feel. But as on today (29/03/2023) there is no any notification on which set of standard have been approved by SEBI (CA or CS institute)
It appears that Government wants to spread the audit work to non CAs through this initiative. It should not happen.
It’s not financial audit, rather its the audit of social impact. It’s right decision to involve the persons with the educational background and experience in development sector.