Why culture is key to the value of audit
May 11, 2018
The old adage ‘the customer is always right’ is a core value for many businesses and, indeed, industries - from hospitality to retail to travel. Not so in my profession. As one of my colleagues recently pointed out, it doesn’t work for the audit industry where quality in our work relies on being able to challenge the customer and exercise professional scepticism at all times.
Having the right values in place and adhering to them is essential for any organisation or industry. That’s why I welcome the new report from our regulator, the Financial Reporting Council (FRC), on the findings of its review of audit firm culture.
The report finds that firms are investing considerable time and effort in their cultures and embed their purpose and values in day to day activities. Firms also have robust processes to sanction poor quality work or behaviour. The report also suggests areas for further improvement, such as reinforcing the societal value of audit and improving the monitoring of success in embedding our desired culture. This is all valuable given the vital role audit firms play in underpinning confidence in the capital markets and their contribution to building trust in society.
I am pleased the report recognises PwC’s values and culture are being embedded consistently across the firm. Our firmwide values - to act with integrity, work together, care, reimagine the possible and make a difference - underpin our commitment to quality. Every day I see our people’s commitment to delivering robust audits - large and small, across all sectors and throughout our global network.
But I also recognise we can do more. For example, recognising high quality audit work more directly, highlighting the role our independent non-executives play in the governance of the firm and engaging clients and other interested parties in a debate around audit, including examining its purpose.
What’s important now is that the report doesn’t just sit gathering dust. This is why at PwC we are talking about the findings and actively encouraging discussion and debate. This includes reflecting on the FRC's perspectives and recommendations and learning from other firms. Embedding our values and living them in everything we do is key to improving audit quality further and underpinning an objective and independent audit profession for the future.