Firm Culture and Governance

Building Ethical Foundations

Strengthening Culture, Governance, and Trust in the Profession

Approved by the IESBA in December, 2024 and commencing in 2025, the Firm Culture and Governance Project aims to develop a culture and governance framework that promotes, supports and reinforces a high standard of ethical behavior by a firm's leadership, other partners, and staff across all of the firm’s services, thereby helping the firm develop a reputation as a highly ethical firm, mitigate the risks of unethical behavior and strengthen public trust and confidence in all of its services.

IESBA FCG Academic Report.pdf
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Organizational Culture and Behavior: A Synthesis of Academic Literature

This report synthesizes global academic literature on culture and governance in organizations. It examines how important organizational culture is in shaping ethical behavior within organizations.

The report was developed by an external expert (Eva Tsahuridu, PhD, Ethics, Culture and Leadership Specialist) at the request of the IESBA to support the work of the Firm Culture and Governance Working Group (FCG WG) in 2024. Its main conclusions informed the FCG WG Report released in January 2025. 

Disclaimer
The views expressed in this document are solely those of the authors and should not be attributed to the IESBA.

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FCG Sample 1
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The Firm Culture and Governance Working Group (FCGWG) Final Report

The FCGWG Final Report highlights the critical role of ethical culture and governance in addressing issues of unethical behavior within accounting firms. Through extensive outreach and research conducted in 2024, the FCGWG identified key drivers of an ethical firm culture, including ethical leadership, transparent accountability mechanisms, and governance frameworks that embed ethical values across all service lines. The report emphasizes that fostering a strong ethical culture not only mitigates risks of unethical behavior but also strengthens public trust, enhances firms’ reputations, and reinforces the profession's public interest responsibilities.

Based on these findings, the FCGWG recommends the development of a global, principles-based standard for firm culture and governance, applicable to firms of all sizes and scalable across different jurisdictions. It also proposes the creation of non-authoritative materials (NAMs) to guide firms in implementing ethical practices. The report calls for stakeholder engagement through global roundtables to gather input and refine the recommendations, ensuring the resulting standard and materials effectively address the public interest and promote an ethics-centered culture within the accounting profession.