Role of Internal Audit in Corporate Social Responsibility

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:

Consisting of 3 or more directors, out of which at least one director shall be an independent director in case of a public company.
Consisting of 2 directors in case of a private company having only two directors on its Board.
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

Disclaimer
This report has been produced by students of Global Risk Management Institute for their own research, classroom discussions and general information purposes only. While care has been taken in gathering the data and preparing the report, the student’s or GRMI does not make any representations or warranties as to its accuracy or completeness and expressly excludes to the maximum extent permitted by law all those that might otherwise be implied. References to the information collected have been given where necessary.
GRMI or its students accepts no responsibility or liability for any loss or damage of any nature occasioned to any person as a result of acting or refraining from acting as a result of, or in reliance on, any statement, fact, figure or expression of opinion or belief contained in this report. This report does not constitute advice of any kind.