A Review of Audit Culture

It is often overlooked that the UK is the home of the modern global accountancy profession. Indeed, many of those who founded the largest international audit firms were members of ICAEW. And it is still where regulators and professional bodies look for leadership when it comes to the future.

That’s why today’s thematic review from the Financial Reporting Council (FRC) is so significant. To the FRC’s credit, it is one of the first regulators to undertake such a review and to publish its findings.

The review reflects the commitment that I see from audit firms, to the values and behaviours that drive high-quality audit. It shows they want to improve and learn, not just when things go wrong but also when things go right. Just as importantly, it sets out a need for firms to be more transparent when it comes to culture, to give greater visibility to what they are doing and to demonstrate they understand the broader value to society at large of what they do. I hope that, on the back of this review, firms will seize the opportunity to learn from each other and when the FRC looks at this again in three years, they will see the dial has moved in the right direction.

As a profession, auditors have been in the spotlight in recent months. As I have blogged several times, we still have some way to go, not just to look at what we can do differently to meet the needs of the societies we serve, but to regain the trust of those societies. We also need to do more to increase competition and choice for PIE audits, removing barriers to entry for those firms beyond the Big Four who currently view the risks involved as too great.

I remain convinced that our profession is fundamentally strong, that auditors want to do the best jobs they can and that, as we continually seek to evolve and improve what we do, we can continue to show leadership to the profession around the world.