Audit Firm Culture: Recent Developments and Trends in the Literature

Posted by ARC Commitee - Dec 22, 2020

In a recent study, forthcoming in the European Accounting Review (EAR) Special Issue on Literature Reviews in Accounting, Cristina Alberti, Olof Bik, Ann Vanstraelen and Jean C. Bedard synthesize research in high quality journals from 2008-2019 relating to organizational culture in audit firms, and provide suggestions for future research.


Strengthening audit firm culture has become a key area of attention. Numerous reports of regulators and standard setters (e.g., International Auditing and Assurance Standards Board, IAASB, 2014; Public Company Accounting Oversight Board, PCAOB, 2015) encourage firms to establish, promote, and embed an appropriate culture and tone at the top to support a high-quality audit, and public oversight bodies are focusing on audit firm culture in their reviews and inspections.


Historically, culture has been viewed as the “DNA” of the audit firm. The end of self-regulation of the auditing profession and the unprecedented increase in regulation worldwide (e.g., Sarbanes Oxley (SOX) in 2002; revised 8th European Union Directive in 2006) were the hard consequences triggered by a culture that was considered more revenue-oriented than quality-oriented. More recently, audit firm leaders, standard setters, and oversight bodies point to audit firm culture and tone at the top as the catch-all solution to control auditors’ behavior, improve audit quality, and restore public trust in the profession (e.g., IAASB, 2014; International Forum of Independent Audit Regulators, IFIAR, 2015).


IAASB (2014) describes key attributes of a culture of audit quality: (1) appropriate tone at the top; (2) appraisal and reward systems supporting audit quality; (3) financial considerations that do not impair audit quality (e.g., budget and time pressure); (4) continuing professional development opportunities and technical support; and (5) a culture of consultation on difficult issues.


We review recent developments in research on factors instilling culture in audit firms, and how culture influences audit quality and auditors’ work attitudes. We develop and apply a three-phase model based on prior research (e.g., Schein, 2017) and professional guidance (IAASB, 2014), which maps cultural embedding mechanisms (i.e., visible manifestations and organizational conditions to establish culture), perceptions of existing culture, and consequences of culture.


Our synthesis shows that the culture of an audit firm is most oriented toward quality if leadership emphasizes professionalism over commercialism, promotes ethical judgments, and facilitates learning through systems, integration of specialists, and interpersonal interactions among auditors. The research cited shows strong influence on audit firm culture of tone at the top set by leadership, as well as incentives in performance/reward systems. Studies we review generally imply continued concern for the influence of commercialism on audit firm culture, but future research should investigate whether recent forces (i.e., pressure from regulators and efforts by the firms) have caused a cultural shift toward professionalism.


We close by suggesting opportunities for future research that can strengthen understanding how audit firm culture can be better managed by firms.


Discover more about our study at:


To cite this article: Cristina Thomas Alberti, Jean C. Bedard, Olof Bik & Ann Vanstraelen (2020) Audit Firm Culture: Recent Developments and Trends in the Literature, European Accounting Review, DOI: 10.1080/09638180.2020.1846574




International Auditing and Assurance Standards Board (IAASB). (2014). A Framework for Audit Quality – Key elements that create an environment for audit quality. Retrieved from:

Public Company Accounting Oversight Board (PCAOB). (2015). Concept Release on Audit Quality Indicators. Retrieved from:

International Forum of Independent Audit Regulators (IFIAR). (2015). Report on 2014 Survey of Inspection Findings. Retrieved from:

Schein, E. H. (2017). Organizational Culture and Leadership (Jossey-Bass).



WordPress Cookie Plugin by Real Cookie Banner