Factsheet - Root Cause Analysis

Factsheet

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Author

IIA-Australia

Date

2025 

Topics Explored

Internal Audit

Format

Factsheet

Extract/Description

Internal auditors detect issues when they perform audits, which are usually called ‘findings’ or ‘observations’. They then seek to identify a recommendation that will remediate the observation. In many cases, internal auditors will recommend a course of action that is merely a symptom (indicator) of the problem, rather than why the issue occurred in the first place. If internal auditors do not find the root cause, issues will continue to occur and future audit reports will continue to report the same issues, rendering internal audit a costly exercise in doing nothing useful.

Key Points

1. RCA is a systematic process for identifying the real, underlying, cause of an error, problem, missed opportunity, or instance of non-compliance. It can identify an approach for responding to the problem.

2. Root cause will often be related to information, tools, capability or motivation.

3. When RCA is used and reflected in internal audit reporting, the quality of the observation will be enhanced as will the recommendation.

Relevant Industries

All

Level of Assumed Knowledge

Intermediate

Aligned to Global Internal Audit Standards

Yes