Drawing upon a series of interviews conducted with leading practitioners and opinion formulators in the social, ethical and environmental audit arena, together with an extensive review of recent literature in the area, this paper offers a critical appraisal of current developments in the newly revitalized social audit movement. We particularly question whether in their enthusiasm for bringing social audit into the mainstream of current business thinking its advocates risk compromising the democratic ideals of the founding fathers of the movement. A particular concern raised is that without real change in corporate governance structures, social audit could become monopolized by consultants and/or corporate management and hence amount to little more than a skilfully controlled public relations exercise.
Recent years have witnessed a remarkable resurgence of academic, professional and corporate interest in the area of social and ethical accounting, auditing and reporting (SEAAR). One striking common feature of the myriad of initiatives taking place lies in an apparent concern to address the information needs of organisational stakeholders via the promotion of dialogue and engagement. Drawing on a programme of short interviews with corporate managers, representatives of the 'big five', consultants and NGOs active in the field, this paper suggests that despite seemingly endorsing active stakeholder engagement current SEAAR practice amounts to little more than corporate spin. An overwhelming concern with promoting the 'business case' in developing SEAAR together with a profound reluctance to address the issue of corporate governance largely removes any potential for enhancing the accountability and transparency of powerful economic organisations. Most fundamentally, failure to address the crucial dimension of corporate power robs current SEAAR of a much needed radical edge.
This paper explores the relationship between accountability, trust and corporate reputation building. Increasing numbers of corporations are mobilising themselves to put more and more information out into the public domain as a way of communicating with stakeholders. Corporate social accounting and stakeholder engagement is happening on an unprecedented scale. Rather than welcoming such initiatives, academics have been quick to pick faults with contemporary social auditing and reporting, claiming that in its current form it is not about demonstrating accountability at all, but rather about building corporate reputation. Academics argue that ‘accountability should hurt’, that if accountability is an enjoyable process, then the organisation isn’t doing it right. For organisations that are currently engaging with stakeholders and ostensibly becoming more transparent about their corporate social performance, this kind of critique is likely to be bewildering. This paper argues that central to the notion of accountability and to contemporary social accounting practice is the concept of trust. Accountability is based upon a distrust of corporate management, whereas corporate reputation building is about strategically seeking to establish trust in stakeholder relationships in order to negate formal accountability requirements. Using a split trust continuum, the paper seeks to explain and synthesise what seem to be two very different paradigms of organisational transparency.
In recent years there appears to have been a veritable boom in the provision of 'quality audits' -that is, audits of organizations' production processes and management systems. Despite the rising significance of this international audit movement affecting hundreds of thousands of organizations world-wide, there has been limited interest in, or critique of, the practice of quality audit by academic auditing researchers. This paper traces the history of quality assurance standards and auditing and finds that quality auditing is not simply an outgrowth of an engineering inspection function. Rather, for several decades, quality auditors have consciously modelled their practice on that of the statutory financial audit, which in turn, exposes them to similar issues with regard to the long standing 'expectations gap' debate. Yet, despite what the authors argue are critical links with the financial audit, there has not been any notable involvement on the part of the accounting profession with quality auditing. The growing demand for 'added-value' audits poses considerable questions for the future development and organizational significance of quality auditing. Current developments in both quality and financial audit services suggest that these two influential audit movements are now competing against each other to promote business excellence and contribute to business strategy.
In the face of major corporate collapses, the audit and assurance function becomes a focus for greater regulation and standardisation, particularly with reference to financial processes. Similarly, in terms of social and ethical accounting functions, greater credibility and assurance is required of public communications purporting to demonstrate responsibility to stakeholders. Criticisms of the financial audit function also have currency in terms of the social and ethical accounting. In this paper the authors examine the development the AA 1000 standard and the latest assurance guiding principles, using the assurance expectations gap as a framework for analysis. They find that, in the interests of true accountability and commitment to stakeholder interests, social and ethical assurance providers must go beyond normative auditing practice and comment on features of performance that would not normally be commented on in financial accounts.
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