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OVERVIEW ON SOCIAL AUDITOR EXAM

In the Budget Speech for FY 2019-20, Hon’ble Finance Minister Smt. Nirmala Sitharaman proposed the concept of a “Social Stock Exchange” as an electronic fund-raising platform under the regulatory ambit of SEBI. This platform aims to facilitate the listing of social enterprises and voluntary organizations working towards social welfare objectives. Through the Social Stock Exchange (SSE), these entities can raise capital in the form of equity, debt, or units similar to mutual funds.

Objectives of the Social Stock Exchange:

i. To create a regulated platform that brings together social enterprises and donors.

ii. To facilitate funding and growth opportunities for social enterprises.

iii. To ensure robust standards of social impact assessment and financial reporting.

SEBI issued regulations on July 25, 2022, to provide additional avenues for Social Enterprises to raise funds through the Social Stock Exchange (SSE). These amendments introduced eligibility criteria for organizations seeking to raise funds through SSE. Entities can be classified as either “Not for Profit Organizations” or “For Profit” Social Enterprises.

To strengthen governance and enhance investor confidence, SEBI introduced the concept of an Annual Impact Report, which is audited by a Social Auditor. The purpose of the Social Audit is to assess the impact made by the Social Enterprise through its activities, interventions, programs, or projects during the reporting period.

ICAI Institute of Social Auditors of India (ISAI), ICMAI Social Auditors Organization (ICMAI SAO), and ICSI Institute of Social Auditors (IISA) are section 8 companies incorporated to enroll and regulate Social Auditors. These institutes, in compliance with SEBI Regulations, focus on capacity building, ethical standards, and compliance with the requirements of the Social Stock Exchange.

Social Auditor Exam

PROFESSIONAL OPPORTUNITY

It is anticipated that a significant number of Social Enterprises, both not-for-profit and for-profit, will leverage the newly created architecture of the Social Stock Exchange (SSE) to raise funds. Each Social Enterprise is required to submit an Annual Impact Report, duly audited by a Social Auditor, to the SSE.

ELIGIBILITY CRITERIA FOR SOCIAL AUDITOR

To become an eligible Social Auditor, individuals must meet the following criteria:

1. Hold the required qualification and experience.

2. Attend a course at the National Institute of Securities Markets (NISM) and successfully pass the examination.

2. Be registered with a Self-Regulatory Organization (SRO) such as ICAI ISAI, ICMAI SAO, or ICSI IISA.

For firms/institutions to qualify, they must have partners/employees who meet the social auditor criteria and have a minimum track record of three years in conducting social impact assessments.

ELIGIBILITY QUALIFICATION & EXPERIENCE FOR SOCIAL AUDITOR

Social Auditors must fulfill one of the following qualification and experience criteria:

i. Post-graduates from universities recognized by the University Grants Commission (UGC) with a minimum of 3 years of experience in the development sector.

ii. Graduates from universities recognized by the UGC with a minimum of 6 years of experience in the development sector.

iii. Cost and Management Accountants, Chartered Accountants, or Company Secretaries holding a valid Certificate of Practice.

ABOUT NISM SOCIAL AUDITORS CERTIFICATION EXAMINATION

The NISM Social Auditors Certification Examination, mandated by SEBI, aims to create a pool of social auditors who can assess the impact of social interventions by various social enterprises raising funds through the SSE platform.

HOW TO REGISTER FOR NISM-SERIES-XXIII: SOCIAL AUDITORS CERTIFICATION EXAMINATION?

To register for the NISM Social Auditors Certification Examination, interested individuals can visit https://certifications.nism.ac.in/nismaol. After successful registration, they can choose a test center, date, and time slot of their preference from the Test Administrator website. Further instructions are available on the Test Administrator’s platform.

FEE STRUCTURE & TEST DETAILS

The fee for the “NISM-Series-VIII: Social Auditors Certification Examination” is INR 1500/- plus applicable GST. The examination consists of 85 multiple-choice questions and 3 case-based questions, totaling 100 marks. The duration of the exam is 2 hours, and each incorrectly answered question incurs a negative marking of 25%. To pass the examination, a minimum score of 60% is required.

STUDY MATERIAL FOR THE EXAMINATION

Upon enrollment for the examination, individuals will receive a soft copy of the workbook/study material. In case of non-receipt, they can contact NISM at certification@nism.ac.in.

FACILITATION FOR BECOMING SOCIAL AUDITORS

The ICAI ISAI, ICMAI SAO, and ICSI IISA are offering a voluntary preparatory education course to assist members in preparing for the Social Auditors certification course conducted by NISM. This course aims to support members in their certification journey, providing comprehensive guidance and knowledge.

In conclusion, the Social Auditor exam and certification process play a crucial role in strengthening the social impact assessment framework and fostering trust in the social sector. By becoming certified Social Auditors, individuals can contribute to the sustainable development and positive transformation of society.

Author Bio

IBBI Valuator for Financial Instruments Retired Banker having an experience of 30 years in advances, Recovery and compliance. Consultant to the Banking Matters Flair to the Audit, Assurance and compliance works worked with Asset Reconstruction Company as consultant Visiting Lecturer on Bankin View Full Profile

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