Future Business Leaders of America (FBLA) Business Management Practice Test

Performing a social audit can hurt a company's reputation.

1. True

2. False

3. Depends on the situation

4. Only during financial crises

The correct answer is: False

Conducting a social audit typically aims to assess a company's social responsibility policies and practices, which includes evaluating its impact on stakeholders and the community. The correct assertion is that performing a social audit does not inherently harm a company's reputation. In fact, a social audit can provide transparency and accountability, demonstrating the company's commitment to ethical practices and social responsibility. When a company engages in a social audit, it often uncovers areas for improvement, helping to enhance its image by addressing any deficiencies. Additionally, positively responding to the audit findings can bolster the company's reputation among customers, investors, and the public, reinforcing trust and loyalty. A well-executed social audit can ultimately lead to greater consumer confidence and a stronger market position. Some scenarios may present challenges or negative findings during a social audit, which could pose risks to reputation. However, the act of performing the audit itself is a proactive measure that aims to improve social and ethical impacts, making it a constructive rather than a detrimental action overall.