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

Related Articles

Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

Audit Auditors ‘in the dock’ over Carillion as report calls for Big Four break-up

5d Emma Smith, Managing Editor
PCAOB sanctions former Deloitte Turkey CEOs over altered documents

Audit PCAOB sanctions former Deloitte Turkey CEOs over altered documents

1w Alia Shoaib, Reporter
KPMG South Africa to review past audit work amid fresh scandal

Audit KPMG South Africa to review past audit work amid fresh scandal

1m Alia Shoaib, Reporter
FRC introduces £10m sanctions for Big Four firms

Audit FRC introduces £10m sanctions for Big Four firms

1m Alia Shoaib, Reporter
Ukraine’s PrivatBank files $3bn claim against PwC

Audit Ukraine’s PrivatBank files $3bn claim against PwC

2m Alia Shoaib, Reporter
Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

Audit Grant Thornton to exit FTSE 350 audit market, citing Big Four dominance

2m Alia Shoaib, Reporter
Big Four dominate FTSE 250 audit market in Q1 rankings

Audit Big Four dominate FTSE 250 audit market in Q1 rankings

3m Alia Shoaib, Reporter
Deloitte to pay $149.5m over Taylor, Bean & Whitaker audit failure

Audit Deloitte to pay $149.5m over Taylor, Bean & Whitaker audit failure

3m Alia Shoaib, Reporter