CSR Audit and Assurance
Home / CSR Audit and Assurance
CSR Audit and Assurance
CSR Audit and Assurance
In today’s environment of increased corporate accountability, ensuring that Corporate Social Responsibility (CSR) initiatives are implemented transparently and effectively is critical. CSR Audit and Assurance services help companies validate their CSR processes, assess compliance with legal requirements, and ensure that CSR funds are used efficiently for intended purposes.
Under Section 135 of the Companies Act, 2013, companies are obligated to spend a prescribed amount on CSR activities. However, mere spending is not enough — companies must also ensure that funds are utilized properly, activities are aligned with Schedule VII, and reporting is accurate. This is where CSR audits play a vital role.
CSR Audit is a structured review of a company’s CSR activities, financial transactions, and governance practices. It provides assurance that:
-
CSR funds are spent in accordance with the company’s CSR policy and legal norms
-
Projects are implemented effectively and generate the intended social impact
-
Accurate disclosures are made in financial statements and annual CSR reports
-
Risks related to CSR implementation are identified and mitigated
Scope of CSR Audit
A comprehensive CSR audit typically includes:
-
Review of the CSR policy and Board-approved projects
-
Verification of fund allocation and utilization
-
Assessment of implementing agencies’ credentials and performance
-
Evaluation of project documentation and outcomes
-
Checking compliance with statutory requirements including filings (e.g., Form CSR-2)
-
Examination of unspent funds and transfers to designated accounts or funds
-
Cross-verification of disclosures in Board Reports and financials
Why CSR Audit is Important
-
Ensures Legal Compliance: Avoid penalties by adhering to Section 135 and related CSR rules.
-
Enhances Transparency: Builds trust among stakeholders, investors, and the community.
-
Improves Governance: Identifies gaps in planning, execution, or reporting of CSR activities.
-
Facilitates Better Impact: Helps companies align CSR efforts with social goals and track effectiveness.
-
Supports Reporting: Strengthens the quality and credibility of annual disclosures and Form CSR-2 filings.