Deeper Dive — Renal Failure: A Crisis in Audit Culture?

We are excited to announce the release of “Renal Failure: A Crisis in Audit Culture?,” the third in our Deeper Dive series of reports. Just as the kidneys flush out toxins in the human body, the accounting profession, and audit firms specifically, are responsible for catching and challenging inaccurate or potentially misrepresentational data in financial statements. When either fails, the results can be ruinous.

We discuss this in light of recent misconduct scandals that have impacted all major accountancies and in most global markets. In addition to the immediate costs, such scandals threaten to erode trust in the audit function more broadly.

In a Preamble to the report, Rachael Johnson, Head of Risk Management and Corporate Governance at the Association of Chartered Certified Accountants (ACCA), discusses a survey of over 1,800 ACCA members on their culture and risk governance concerns and highlights an apparent disconnect between audit and risk management.

In "Renal Failure: A Crisis in Audit Culture?," we examine the following:

• The importance of strong, independent audit to public trust
• Perceived work quality and culture deficiencies among audit firms
• Regulatory efforts to institute reforms in the audit industry
• How regulators and firms can become proactive in managing these issues

“Renal Failure” is being made available on a complimentary basis to registered Observers of Starling Insights. Members and Observers will find the option to View/Download the PDF of the report on the right side of the page.

To Join as a Member or register as an Observer, follow this link, and then return here to download the report. If you would like to read more, Members can access our past Deeper Dive reports — "The Costs of Misconduct" and "The Era of Accountability".