Corporate Services Audit

After reading this article you will learn about Corporate Services Audit of a Business Enterprise:- 1. Concept of Corporate Services Audit 2. Scope of Corporate Services Audit 3. Approach.

Concept of Corporate Services Audit:

‘Corporate Services’ is a generic term which implies service-oriented obligations of a corporate sector entity to different interest groups such as: Consumers, Employees, Shareholders, Fellow-businessmen, Community and State.

The term signifies social responsiveness of a business enterprise. The social scientists and economists are of the view that a precise definition of ‘services’ is not so important in the wider connotations of the concept.

According to them, service-oriented responsibilities of a business concern are necessarily to be different in different circumstances and situations. For example, corporate services during periods of a country’s emergency (e.g. earthquake, war, etc.) are of great significance.

To cite another example, a corporate agreement to sell goods to a friendly country within the state legislation does not violate the canons of service-oriented business respon­sibilities, but similar attempt to an alien enemy is certainly an undesirable service.

So, the concept of the term is difficult to be defined within certain fixed parameters. Again, the service-oriented responsibilities are not only to be discharged by the private sector but also by public sector business enterprises. For the latter group of enterprises, such responsibilities are more than a necessity and unique in characteristics and content.

Scope of Corporate Services Audit:

In the above context, the scope of corporate services audit extends to the critical examination of the various aspects of services and their extent that have been satisfactorily rendered by a corporate body, and of evaluation of the degree of awareness and responsiveness on the part of such enterprise.

The performance of management towards consumers, employees, shareholders, community, fellow-businessmen and governments is separately studied and evaluated by a management auditor while conducting such audit. The areas to be covered under the ambit of ‘Corporate services audit’ are illustrated in a chart indicating the scrutiny and evaluation criteria under each group.

Approach of Corporate Services Audit:

The concept of ‘corporate services audit’, according to some classical sociologists, is that its appraisal system should take into account the level of contribution business enterprises makes to society and its environment towards raising the quality of life through better product-quality and services rather than profit maximization.

So the audit considerations include assessment of reactions to the following basic questions like:

(i) What a business may do in terms of available opportunities;

(ii) What a business can do in terms of capabilities and resources;

(iii) What a business wants to do in terms of aspirations, ambitions and values of top management;

(iv) What a business should do in terms of response to society and its environment.

This audit attempts to distinguish between the ends (i.e. profits) and means (i.e. services) of business and provides a new dimension to the concept of audit approach. Its conceptual approach can be best explained by a model, more or less along the lines of ‘social audit’.