Remaking audit: A plan for culture change and regulatory reform
The audit industry is often seen as a not very exciting area. Auditors, sometimes referred to as ‘bean counters’, are seen as simply double-checking numbers with little room for judgement. As we showed in our last report, this view is entirely inaccurate.
Auditors should fulfil the role of trusted referees who speak up, challenge, and conduct reliable detective work on behalf of society, checking whether businesses report an informative picture about their operations. If the audit sector does its job well, its outputs should be all but boring. However, the sector is a long way away from that. In this report we highlight how to get there.
In our first report, we showed the need for profound reform in the audit industry. In this paper, we flesh out how we think these areas should be tackled, with a particular emphasis on the need for policy changes that trigger culture change in audit firms.
While there have been a number of proposals in the other five of the areas highlighted above (which we draw on), recommendations around culture change tend to be particularly under-developed. We aim to fill this gap with our proposals.