"An ethical profile brings together all the factors which affect a company's reputation, by examining the way in which it does its business." Explain the suggested steps of auditing the ethical practices to be followed b

An ethical profile brings together all the factors which affect a company's reputation by examining the way in which it does business. The reasons for examining the state of a company's ethics are many and various. They include external societal pressures, risk management, stakeholder obligations, and identifying a baseline to measure future improvements. In some cases, companies are driven to it by a gross failure in ethics, which may have resulted in costly legal action or stricter Government regulation. The following are the some of the suggested steps in ethics audit: The first step in conducting an audit is securing the commitment of the firm's top management. The second step is establishing a committee or team to oversee the audit process. The third step is establishing the scope of the audit. The fourth step should include a review of the firm's mission values, goals, and policies. The fifth step is identifying the tools or methods that can be employed to measure the firm's progress and then collecting and analyzing the relevant information. The sixth step is having the results of the data analysis verified by an independent party. The final step in the audit process is reporting the audit findings to the Board of Directors and top executives and, if approved, to external stakeholders. Social and ethical accounting, auditing and reporting are in embryonic stage. The best practices are gradually emerging and will continue to develop over the coming years. Social and ethical accounting provides a way in which companies can assess their performance and bring the perspective of stakeholders into this assessment. By bringing social and ethical accountability process into its strategy and operations, a company can measure its performance for itself and for its stakeholders as well. This will help a company to address a series of risks that may otherwise arise unseen and unchecked with any of the stakeholder.