IA-101 GETTING TO THE ROOT OF THE MATTER: ROOT CAUSE ANALYSIS

IA-101 GETTING TO THE ROOT OF THE MATTER: ROOT CAUSE ANALYSIS

DESCRIPTION

In today’s audit environment there is a lot of discussion around audit functions “adding value.” Audits are time consuming and costly, and they’re often a source of frustration for the audit client. Why? As auditors we often hear that the “auditor(s) just doesn’t understand my business.” The business can feel this way as a reaction to the proposed action and remediation plan. If an audit team doesn’t perform effective root cause analysis, then the recommended action often will not solve the root cause of the issue and problems will persist.

 

To truly add value, an audit must address the root causes of the issues and exceptions identified, not just the symptoms. This course will introduce the various tools and methodologies used for root cause analysis and show how to apply them to the audit process. Participants will learn interactively through a combination of lecture, case studies, and exercises.

LEARNING OBJECTIVES:

  • Understanding Root Cause Analysis (RCA)
  • Introduction to the various tools and methodologies that can be utilized for RCA
  • Understanding how RCA can be applied within audits
  • Understanding when to utilize RCA in an Internal Audit
  • Understanding the common challenges when using RCA
  • Learning how to apply RCA in practice

 

COURSE OUTLINE

Understanding Risk Cause Analysis (RCA)

  • What is it?
  • A very brief history and background of RCA
  • Why should it be done?

RCA in Internal Audit—Why?

  • Business responsibility or Internal Audit?
  • Adding value
  • When should we conduct an RCA?
  • At what point in an audit should the RCA be conducted?
  • When to use RCA outside of an audit

Standards and Best Practices

  • Overview of current IIA guidance
  • IIA Practice Advisory 2320-2

RCA Methodologies and Techniques—Most Common in Audit

  • Pareto Analysis
  • Ishikawa Method—Fishbone diagrams
  • Kipling Methodology—5W1H
  • 5 Whys
  • 5 Cs

Other RCA Methodologies

  • Failure mode and effect analysis
  • SIPOC
  • Statistical correlation
  • Lean six sigma—waste walks

The RCA Process

  • Defining the issue
  • Diagnosing the issue using one of the methodologies
  • Identifying potential alternate solutions/recommendations
  • Determining if an interim or permanent solution is viable
  • Ensuring appropriate controls for recommended solution
  • Lessons learned

Adding Value – Linking Root Cause to Findings and Objectives

  • Linking the finding to its root cause
  • Linking the finding and root cause to the audit and business objectives
  • Understanding the control failure root causes
  • Linking control failure root causes to COSO 2013

Common Challenges and Obstacles

  • Environmental obstacles
  • Common mistakes
  • Biases that impede RCA
  • Drawing the wrong conclusion
  • Resolutions that don’t resolve the issue
  • Communication—interviewing, Q&A, follow-up

Communicating Root Causes

  • Results
  • Solutions—MoSCoW Analysis
  • Including root cause in the audit report
  • Action plans
  • Difficult situations
Duration

CPE

Delivery

Field

Level

Who Should Attend

Prerequisites

Advanced Preparation

2 Days

16

Group-Live

Auditing

Intermediate

Internal audit staff and management, operations staff, and management

Professionals with at least 2 years of experience

None