PracticeAuditIFAC auditor unit calls for ‘right tone’ at top

IFAC auditor unit calls for ‘right tone’ at top

A guidance paper by the auditor unit of IFAC explores how setting the right tone can positively influence audit quality

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.

Further reading:

Corporate irresponsibility: a modern disease?

IFAC policy urges active role on regulation

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