Questions: Which of the following is the best example of a social audit? A. An oil company performs an internal study on how well it is meeting the corporate social responsibility goals it has established. B. The government accesses internal company records to determine if a company is breaking laws. C. An environmental group performs a study on how an oil company is handling the cleanup of an oil spill. D. An external audit researching the ability of a company to operate in an area that is environmentally unsustainable. E. An oil company performs an internal study to determine if the firm can remain profitable after being sued by an environmental group for not properly cleaning up an oil spill.

The answer is A: An oil company performs an internal study on how well it is meeting the corporate social responsibility goals it has established.

Explanation for each option:

A. An oil company performs an internal study on how well it is meeting the corporate social responsibility goals it has established.

• This is the best example of a social audit. A social audit is a process of evaluating a company's social and ethical performance, often in relation to its corporate social responsibility (CSR) goals. This involves assessing how well the company is meeting its commitments to social and environmental responsibilities.

B. The government accesses internal company records to determine if a company is breaking laws.

• This is not a social audit. This scenario describes a regulatory or legal audit conducted by the government to ensure compliance with laws and regulations, rather than evaluating the company's social and ethical performance.

C. An environmental group performs a study on how an oil company is handling the cleanup of an oil spill.

• This is an external evaluation or investigation by an environmental group, not a social audit. While it involves assessing the company's environmental performance, it is not conducted by the company itself and does not necessarily cover the broader scope of social responsibility.

D. An external audit researching the ability of a company to operate in an area that is environmentally unsustainable.

• This is an environmental impact assessment or sustainability audit, not a social audit. It focuses on the environmental sustainability of the company's operations rather than a comprehensive evaluation of its social and ethical performance.

E. An oil company performs an internal study to determine if the firm can remain profitable after being sued by an environmental group for not properly cleaning up an oil spill.

• This is a financial or risk assessment, not a social audit. It focuses on the company's financial viability and legal risks rather than evaluating its social and ethical responsibilities.

In summary, option A is the best example of a social audit because it involves an internal evaluation of the company's adherence to its corporate social responsibility goals.