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Firm Culture and Governance


In accordance with the IESBA Strategy and Work Plan 2024-2027 (SWP), this work stream will, amongst other things, explore the root causes of the ethical lapses and undertake a review of the provisions in the extant Code to determine if the Code should be further strengthened to promote a robust culture of ethical behavior within firms. The IESBA will also continue to promote the importance of ethics within firms, highlighting the profession’s responsibility to act in the public interest in the midst of increasing pressures on professional accountants to act unethically.



IESBA June 2024 Meeting Highlights

The IESBA considered an update from the Working Group on its outreach activities across various regions in Q2 2024. The IESBA briefly considered the Working Group’s preliminary observations from the outreach, grouped into eight broad categories, including the role of the accountancy profession to act in the public interest, the role of leadership and governance, accountability of leadership, rewards and recognition, transparency, education, speak-up culture as well as the ecosystem.

The IESBA was then briefed on a literature review on organizational culture by Dr. Eva Tsahuridu, focusing on three aspects: what is culture, key elements of, and influences on, ethical culture as well as the impact of ethical culture on ethical behavior.

Finally, the IESBA considered presentations from Mark Babington, IESBA Board member, on the UK Financial Reporting Council’s (FRC) Audit Firm Governance Code, and Julie Corden, IAASB Board member and Chair of the ISQM 1[1] Task Force, on ISQM 1 in relation to governance and leadership, and firm culture.

The IESBA will consider the preliminary findings and recommendation from the Working Group at its September 2024 meeting.


[1]     International Standard on Quality Management (ISQM) 1, Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements


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