note on Social Audit

fraudulently or in a manner oppressive to any of its members, or person connected with management is guilty of fraud, etc., then the Central Government may file a petition for winding up on the ground that it is just and equitable to do so [Section 243].
The Central Government may also apply to CLB for relief under Section 397 and 398 [Section 243].
Where it appears to the Central Government that the company ought to institute proceedings in public interest (1) for recovery of damages from any person guilty of fraud, misconduct or misfeasance in connection with the promotion or formation or management of the company; or (2) for recovery of any property of the company which has been misapplied or wrongfully retained, the CentraIGovt., may itself bring such proceedings in the name of the company [Section 244].
Both special audit and investigation are tools for ascertaining facts'about the affairs of the company. Action depends on the findings. Unlike, special audit, companies Act provides in detail various actions that can be taken on the basis of investigation/inspection report. Particularly the power given to the Central Govt. under Section 244 in the case of investigation is not available in the case of a special audit.
Q 47. Write a note on Social Audit. P.tLv~~,
..
Social Audit
In a socialistic society, where public participation in decision-making process is accepted, it is imperative that from a mere 'stattitory financial audit' we move towards 'performance audit' and 'efficiency audit'. Social audit is a combination of these two functions. It is not enough to reveal the assets and liabilities of a company as at a particular date. What is needed is how effectively were the assets utilised for optimum usage and benefits to the community. This audit is called 'social audit' not because it deals with social benefit q,erived, like, current value accounting or is related to human assets accounting. What is implied is to give emphasis on the expenses side of the profit and loss account and the benefits acquired due to each expenditure and take credit in the 'Social Audit' and any failure to take corrective action by management ought to be taken to the debit side of the Social Audit. Because of the Social Audit, any management, worth the name, will ensure that debit or negative factors do not find place in the Auditor's Report as adverse publicity will be difficult to explain.
Q 48. How would you deal with the appointment of Auditors in the following cases:
(i) The first Auditor has not been appointed by the Board of Directors within
one month of incorporation of the company. [CA. (Final) May, 1999J
(if) One of the two Joint Auditors appointed in the last annual general
rDmeeting resigned. [C.A. (Final) Nov., 1996J
l.iJ!!!!; One of the partners of the firm of Chartered Accountants appointed as
Auditors died.
(iv) The aggregate shareholding of Nationalised Bank, LlC, lOBI exceeded
65% of the paid-up share capital of the company.
[C.A. (Final) Nov., 1994J