The Institute of Chartered Accountants of India (ICAI) is hopeful of finalising the social accounting standards by the end of the year after Sebi on July 25 announced the regulations defining the social stock exchange, social enterprise and social auditor. “We are working on the standards and we will send them to Sebi for its approval. There will be about 16 focus areas.

ICAI will develop the standards as well as register the auditors who would conduct the social audit,” ICAI president Debashis Mitra said on Tuesday. A social stock exchange has been defined by Sebi as a separate recognised stock exchange with nationwide trading terminals that will allow not for profit organisations (NPO) to register and list securities. These organisations can raise funds by issuing zero coupon-zero principal instruments. The funds raised could be utilised for undertaking social objectives. A social audit will involve a formal review of the NPO’s activities, including the utilisation of the availed resources to achieve the social obligations.

A social auditor has been defined as an individual registered with a self-regulatory organisation under the ICAI who has qualified for a certification programme conducted by the National Institute of Securities Market, with whom the ICAI is working towards developing course curriculum and study material for the certification programme. The Sustainability Standards Reporting Board of the ICAI is working on developing the social audit framework that will cover the elements of audit of impact report of projects, programmes and activities of the NPOs listed on the social stock exchange.