Culture and Conduct
Published: 8 July 2024
1 minute read
Audit firms need the right culture to drive the right behaviours, which in turn are necessary for high-quality audits. We undertake work to assess and monitor various aspects of the culture at the firms, with a specific focus on the behaviours and mindset that correlate to high-quality audit. We also expect firms to have an ethical culture, and we monitor ethical conduct matters, including non-financial misconduct.
We act in the public interest through our contribution to the safeguarding of the reputation and resilience of the audit market, and promote the attractiveness and future of the profession, by which we monitor how firms utilise key drivers of behaviour to create a culture that supports high audit quality and ethical conduct.
We encourage growth in the audit market through supporting a competitive environment and creating a more level playing field for the smaller Tier 1 and Tier 2 firms by sharing good practice and market insight.
We look at Root Cause Analysis from FRC enforcement cases and audit quality inspections, which highlighted one of the most common causes of failure is behaviour or mindset, and in particular the lack of scepticism and challenge. News covering matters of integrity and confidentiality at audit firms, as well as reported recruitment cheating and assessment sharing also point to culture being at the root of poor ethical conduct.