Cookie preferences
Settings I agree

FAR Practice Note - Perspectives on Audit Firm Culture

AFM's culture initiative aims to improve audit quality by changing internal cultures of audit firms. This initiative is based on the belief that internal culture influences audit quality and can be measured and changed. But there are important challenges, including the ability to measure culture, the link to audit quality, and the assessment of the costs and benefits of cultural changes. It also is unclear whether clients are willing to pay for increased audit costs resulting from cultural changes.

 To gain insights about audit firm culture, Francis’ research team interviewed senior leaders of the Big Four audit firms in the Netherlands to provide perspectives on their culture initiatives. These initiatives primarily focus on changing partner behaviors, emphasizing (audit) quality, and using feedback mechanisms.

“A common concern among all four firms is that the focus on a zero-error culture comes at the expense of innovation and a neglect of the business side of the audit firms’ practices. A singular focus on a zero-error culture is probably not sustainable, given the commercial and business needs of the firms to be profitable.”

 The paper also outlines challenges specific to instilling culture in audit firms, such as their decentralized nature and reliance on small partner-led engagement teams.

 Francis proposes to use a survey based on the widely applied Competing Values Framework to measure perception of audit firm culture and assess the success of culture change initiatives.


Prof. dr. Jere R. Francis

Professor Jere Francis is ranked among the top ten academics to publish in leading scientific journals in the field of accountancy research. He won two awards from the American Accounting Association (AAA) for his substantial contribution to auditing research. He was also named Outstanding Audit Educator in 2013 by the AAA. Professor Francis served on the editorial boards of several leading scientific journals, including Abacus, Accounting Organizations & Society, Accounting & Finance, Auditing: A Journal of Practice & Theory, Contemporary Accounting Research, Journal of Accounting & Economics, Review of Accounting Studies, and The Accounting Review. In addition to being of scientific import, his research has been of practical significance to accountants and regulatory authorities and he has presented his research to leading international accountancy firms, the American Institute of Certified Public Accountants, the World Bank and the Public Company Accounting Oversight Board in the United States. As FAR Research Chair, Professor Francis conducts scientific research on the quality of audits. He will also boost auditing education in the Netherlands with the help of several PhD students as part of this chair position.

Back to overview