(a)
(i) Bright Future Ltd is pursuing a shapers of society corporate social responsibility stance. Shapers of society stance regard financial considerations as of secondary importance or a constraint. These are activists, seeking to change society and social norms. Here the social role is the raison d’être of the business. Such organizations may see their strategic purpose as “changing the rules of the game” through which they may benefit but by which they wish to assure that society benefits. In this role it is unlikely that they will be operating on their own: rather they are likely to be partnering with other organizations, commercial and otherwise, to achieve their purposes. Bright Future Ltd has put the Harmonyville community at the Centre of its purpose.

(ii) Core Profit Ltd is pursuing the laissez-faire stance of corporate social responsibility. The laissez-faire view represents an extreme stance. Proponents argue that the only responsibility of business is to make a profit and provide for the interests of shareholders. It is for government to prescribe, through legislation and regulation, the constraints which society chooses to impose on businesses in their pursuit of economic efficiency. Organizations should meet these minimum obligations but no more. Expecting companies to exercise social duties beyond this can, in extreme cases, undermine the authority of government.

(iii) GreenPath Ltd is pursuing an enlightened self-interest stance of corporate social responsibility. Enlightened self-interest is tempered with recognition of the long-term financial benefit to the shareholder of well-managed relationships with other stakeholders. The justification for social action is that it makes good business sense. An organization’s reputation is important to its long-term financial success. Given that employees see it as important that their employer acts in a socially responsible manner, a more proactive stance on social issues also helps in recruiting and retaining staff. So, like any other form of investment or promotion expenditure, corporate philanthropy or welfare provision might be regarded as sensible expenditure. The avoidance of “shady” marketing practices is also necessary to prevent the need for yet more legislation in that area. Managers here would take the view that organizations not only have responsibility to their shareholders, but also a responsibility for relationships with other stakeholders (as against responsibilities to other stakeholders).

(iv) Unity Corp Ltd is pursuing a forum for stakeholder stance of corporate social responsibility. A forum for stakeholder stance explicitly incorporates multiple stakeholder interests and expectations rather than just shareholders as influences on organizational purposes and strategies. Here the argument is that the performance of an organization should be measured in a more pluralistic way than just through the financial bottom line. Companies in this category might retain uneconomic units to preserve jobs, avoid manufacturing or selling “anti-social” products and be prepared to bear reductions in profitability for the social good. Some financial service organizations have also chosen to offer socially responsible investment “products” to investors. These include only holdings in organization’s that meet high standards of social responsibility in their activities.

(b) Extent of reliance to be placed on the work of Internal Audit (i) Organizational status – internal audit’s specific status in the organization and the effect this has on its ability to be objective. Ideally, internal audit function should have a direct line of communication to the entity’s main board or audit committee and be free of any other operating responsibility. External auditors should consider any constraints or restrictions placed on internal audit. (ii) Scope of function – the nature and extent of assignments which internal audit performs. External auditors should also consider whether management and the directors act on internal audit recommendations and how this is evidenced. (iii) Technical competence – whether internal audit work is performed by persons having adequate technical training and proficiency as internal auditors. External auditors may, for example, review the policies for hiring and training the internal audit staff and their experience and professional qualifications, also how work is assigned, delegated and reviewed. (iv) Due professional care – whether internal audit work is properly planned, reviewed and documented. The existence of adequate audit manuals, work programmers and working papers may be considered, also consultation procedures.