Root Cause Analysis for Enhancing Internal Audit Effectiveness

Overview

When a problem occurs in an organization, it is followed by many questions — the first of which, and probably the most important, is “why?” To answer this all-important question thoroughly and completely, internal auditors should seek to identify the problem’s origin — the root cause. A root cause analysis should be a core building block to help answer the question of “why,” and enhance an organization’s continuous improvement efforts.
This one-day course will explore key root cause analysis tools and techniques that can be utilized in the planning, fieldwork, and reporting phases of an internal audit engagement; and enhance audit effectiveness, strengthen audit observations, and facilitate deeper discussions with management on issues identified. These tools can be used apart from or in conjunction with existing audit methodologies, tools, and techniques. You will have the opportunity to practice and apply the skills learned through

Target Audience

Chief audit executives (CAEs) who would like to gain an understanding of how root cause analysis concepts, tools, and techniques can be incorporated into audit strategies; audit managers interested in learning how to lead and manage root cause analysis efforts on audit projects; auditors-in-charge who want to develop skills for using root cause analysis when supervising audit projects; and senior and staff auditors seeking opportunities to practice root cause analysis during audit engagements will benefit greatly from the concepts in this course.

Course Objectives

Identify the purpose, importance, and key terms of root cause analysis.
• Recognize the importance of critical thinking in determining root cause.
• Identify the relevant International Standards for the Professional Practice of Internal Auditing (Standards) and related root cause analysis Implementation Guidance.
• Discover the importance of process documentation, and understanding it as the groundwork for effective root cause analysis, utilizing the process profile worksheet.
• Explore measures of success and trigger events as key elements in root cause analysis.
• Apply root cause analysis concepts, tools, techniques, skills, and templates within an audit setting.
• Describe how root cause analysis can be used to significantly enhance reporting of audit results.

Course Content

Root Cause Analysis: An Overview
• An explanation of root cause.
• The definition of root cause analysis.
• Purpose and importance of root cause analysis.
• Key root cause analysis terms.
• The IIA’s International Professional Practices Framework (IPPF) Standards and Implementation Guidance associated with root cause analysis.
• Applying critical thinking to root cause analysis.
• Benefits of root cause analysis.
• Root cause analysis considerations.

Root Cause Analysis in Planning
• Audit planning phase.
• Defining a process.
• Identifying root cause analysis trigger events.
• Root cause analysis tools and techniques:
o Tool: SIPOC diagram.
o Tool: RACI diagram.
o Tool: Flowcharting.
• Measurements of success.

Root Cause Analysis in Fieldwork
• Purpose and structure of the audit fieldwork phase.
• Controls testing.
• Business process analysis.
• Tools and techniques for root cause identification:
o Tool: The 5 Whys.
o Tool: Fishbone diagram.
o Tool: Cause and effect matrix.
• Root cause measurement and prioritization.
• Data analytics.

Root Cause Analysis in Reporting
• Relevant IPPF Standards and Practice Guides for reporting root cause analysis.
• Components of an audit observation associated with root cause analysis.
• Tying root cause analysis audit findings to planning documentation.
• Linking root causes to recommendations and management action plans.

Prerequisites 

Completion of Critical Thinking—A Vital Auditing Competency, or equivalent experience.

Advance Preparation: None