Role of Internal Audit in Corporate Social Responsibility

Role of Internal Audit in Corporate Social Responsibility (CSR)

By Ankit Arora, PGDRM Batch Jan’21-22



What is corporate social responsibility?

As per section 135 of THE COMPANIES ACT 2013 every company has to mandatorily spend 2%of their last 3-year average profit on certain specific areas of social upliftment in the discharge of their social responsibilities.

Every company including its holding or subsidiary and includes foreign company defined under section 2(42)of the companies act 2013 having its branch office in India with limits crossing 
Net worth: 500cr or more, or
Turnover: 1000cr or more, or 
Net profit: 5cr or more 
During the immediately preceding financial year shall constitute a CSR committee of the board.


CSR Committee

Every Company on which CSR is applicable is required to constitute a CSR Committee of the Board:

  1. Consisting of 3 or more directors, out of which at least one director shall be an independent director in case of a public company.
  2. Consisting of 2 directors in case of a private company having only two directors on its Board​.
  3. Consisting of at least 2 persons in case of a foreign Company of which one person shall be its authorized person resident in India and another nominated by the foreign company

Role of CSR committee


Role of Internal Audit in CSR


  • Internal Auditors might facilitate or advise management on CSR self-assessment activities.
  • Internal Auditors might be involved in auditing CSR programs, either as individual components of the audit plan or as a broad-based review of how CSR is managed.
  • Internal Auditors might become involved in coordinating or participating in CSR Report verifications {assurance audits} or assurance relating to controls over public disclosures of financial and non-financial information relating to CSR.


Major Areas of Internal Audit Significance



Read the full research here: Corporate Social Responsibility (CSR) by Ankit Arora


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