Audit Firm Culture

Topics: Ethics, Business ethics, Auditing Pages: 4 (1846 words) Published: July 31, 2014
The Audit Firm Culture and its Affects on Quality Audits
By Danielle Reynolds

A company’s culture has a large impact on the ethical behavior of employee’s and an employee’s ethical behavior plays an important role in the quality of the audit. Now, there are several factors that affect the quality of an audit but the one that will be focused on in this paper is the effect the audit firm culture has on the audit quality. Audit firm culture effects so many different things at a firm including the kind of behavior that is rewarded and determining how important ethics are in the workplace. The audit firm culture has the largest impact on the quality of an audit and can either negatively or positively affect the audit outcome. Over the next few pages you will read and see just why that is. The kind of leadership that you have within a company sets the tone for the way the company holds its standards. In a paper prepared for Ernst & Young it states that, “One fundamental driver of audit quality, agreed by all taking part in the discussion, was the need for the people at the top of audit firm to set an appropriate tone and culture, to ensure that the work was carried out conscientiously, ethically, and in line with all appropriate standards and guidelines. (Bender)” The management needs to be strong examples to their subordinates of how one should ethically behave and perform a quality audit. Management sets the tone and the employees will follow suit. If management does not reward or support positive ethical behavior then neither will the employees. An article called,” The Negative Affects of Corporate Culture,” (Mack) states that, “When managers are unethical, employees will emulate the bad behavior.” Employees look to management to show them how they should behave and they will copy what they see, even if it is negative or unethical. If they see managers cutting corners to get things done faster or to save money, then employees will do the same which can...

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