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The quality of culture

The latest AQF debate highlighted the importance of business culture and the challenges of getting it right. Louise Sharp shares the highlights.

You may wonder why ‘Whose culture is it anyway?’ was the subject for discussion at the latest Audit Quality Forum (AQF). FRC chairman Sir Win Bischoff reminded attendees that: “At every part of an audit engagement, auditors need to have assurance and evidence to prove that management operates with integrity and transparency.” Culture impacts on the nature of risks and effectiveness of internal controls in business and these considerations can now be included in the extended auditors’ report.

To inject some spirit into the discussions, Mark Steel, comedian, broadcaster and newspaper columnist, gave his provocation: “There is a sense in the general population that there is something wrong with business culture. That it is distant and removed and those at the top are there to serve themselves.” He noted that the majority of people’s contact with big business is at the point of the call centre, which can do a lot to shape society’s attitudes.

Support long-term success

So how can businesses establish a culture that supports long-term success? In her keynote speech, Baroness Neville-Rolfe, parliamentary under-secretary of state for business, innovation and skills, and intellectual property minister, said: “We always have to remember that business earns so much of the money, creates the jobs, actually builds the hospitals, builds the schools and there is an important wider objective and mission here.” Neville-Rolfe explained how boards should play a central role in shaping the strategy and culture of a business. She highlighted the new market opportunities that the digital world brings but noted that businesses must also tackle the multiple risks that new technologies and opportunities can bring – as well as continue to support their legacy businesses.

This is an extract from an article in the February 2016 edition of Audit & Beyond, the magazine of the Audit and Assurance Faculty.

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