Why audit and accounting failures are often cultural and what we can do about it
The following was originally published on January 23rd 2026 by the Edge Singapore
When major audit or accounting failures make headlines, the first instinct is to look for the individual at fault. Who made the wrong call? Who crossed the line? Who failed to speak up?
Individual accountability matters. But experience tells us it rarely explains the full story.
Across Asia and globally, a familiar pattern emerges when failures are examined closely. Problems rarely begin with blatant misconduct. They start with small compromises, rationalized decisions, or “grey area” judgments that are not recognized as ethical issues at the time. Over time, those choices become normalized, silence takes hold, and ethical risk accumulates until it surfaces in ways that damage trust.
This pattern is visible across many of the scandals analyzed by regulators and oversight bodies. Early warning signs are often present, but they are minimized, reframed as technical matters, or absorbed into everyday practice. What stands out is not the absence of rules, but how organizational environments allow concerns to be deferred, diluted, or ignored.
In fast-growing, highly competitive environments like Singapore and the wider Asia-Pacific region, these dynamics are well understood. Accounting firms operate under intense commercial pressure, tight timelines, complex regulation, and rapidly evolving expectations around sustainability, technology, and governance. In such settings, the real question is rarely whether strong and needed standards exist. It is whether organizational culture enables people to apply them with integrity, especially when incentives are strong or pressure is high.
Consider some well-known types of failures.
Exam-cheating scandals have shown how unethical behavior can become embedded when performance targets dominate and organizations signal, explicitly or implicitly, that outcomes matter more than how they are achieved. No single act may seem decisive. But taken together, such cases point to cultures where shortcuts are tolerated, challenge is muted, and accountability becomes diffuse.
Conflicts of interest offer another illustration. Professionals may find themselves providing advice to one or more clients based on confidential information obtained from another client, or accepting aggressive interpretations that technically comply with standards but strain their professional judgment when an audit client is also a lucrative consulting client. When these situations are framed as technical or commercial rather than ethical, judgment erodes. What begins as an exception quietly becomes routine.
Similar risks are emerging in the still-developing sustainability reporting and assurance ecosystem. Greenwashing is rarely about outright fabrication. More often, it stems from selective disclosures, over-confidence in immature models, or pressure to present a positive narrative. Without cultures that encourage challenge, skepticism, and pause, ethical blind spots multiply.
What unites these examples is not a lack of professional standards or codes. It is the environment in which decisions are made.
Ethical failures are often cultural, not individual.
Culture shapes what people notice, what they question, and what they feel able to challenge. It determines whether concerns are escalated early or buried, whether ethical discomfort is taken seriously or dismissed as an inconvenience, and whether leadership rewards sound judgment or merely results. Ethics does not live only in personal character. It lives in systems.
This insight is not new. Research and regulatory experience consistently show that ethical behavior is strongly influenced by organizational culture. Yet globally, there is still no common baseline to help accounting firms assess and strengthen ethical culture and governance in a consistent and practical way.
This gap matters for accounting firms, for markets, and for public trust.
That is why the International Ethics Standards Board for Accountants (IESBA) has launched its Viewpoints on Firm Culture and Governance, alongside a global dialogue initiative to test and refine them with stakeholders. The aim is not to prescribe a one-size-fits-all solution or to replace individual accountability, but to complement it with a global ethical culture baseline that is fit for purpose.
Any framework that may emerge from this work will be principles-based and scalable. Accounting firms of different sizes and structures face different realities, but all need clarity on how culture and governance support ethical behavior across the full range of professional services. The focus is on outcomes: creating environments where people are encouraged and expected to act in the public interest, even when doing so is uncomfortable.
Singapore’s role in this conversation is particularly important. As a leading financial center with strong regulatory foundations, it sits at the forefront of emerging ethical risks. But it is also at the forefront of the search for solutions. That conclusion comes directly from two days of intensive discussions IESBA recently held in Singapore with regulators, professional bodies, firms, and CFOs. What stood out was not complacency, but a strong appetite to engage, to challenge existing approaches, and to help shape practical, forward-looking responses.
Trust is a strategic asset. Once lost, it is costly to rebuild. Strengthening firm-wide culture and governance is not about avoiding the next negative headline. It is about ensuring that the countless decisions made every day, often out of the spotlight, are guided by ethical judgment, responsibility, and the public interest.
That is a challenge worth taking seriously. And one we can do something about.