IFAC auditor unit calls for ‘right tone’ at top

The Translational Auditors Committee (TAC) of the Forum of Firms, a unit of the International Federation of Accountants (IFAC), has released a study which explores current practices among members of the Forum of Firms, an association of networks of international accounting firms that perform transnational audits.

The guidance paper, Tone at the Top and Audit Quality, based on the input of 10 TAC members, representing some of the biggest international networks, notes that, creating the right ‘tone at the top’ is not only an important element of corporate governance, but also key to effective operations of audit firms.

‘Leaders of accounting firms have a responsibility to ensure that the commitment to quality is clearly embedded in their organisation’s values, code of conduct, training, and reward policies,’ David Maxwell, Forum of Firms chairman, says.

The paper describes five areas in which management can address tone at the top issues: strategy, communication, job descriptions, performance appraisals, and monitoring. Examples are also provided to further clarify the types of policies and procedures that are being put in place and the corresponding system of rewards and sanctions.

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