Authors

James C Paterson

Date

Topics Explored

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Extract/Description

When internal auditors perform audits they detect issues which are usually called ‘findings’ or ‘observations’. They then seek to identify a recommendation to remediate the observation. In many cases, internal auditors will recommend a course of action that merely addresses a symptom (indicator) of the problem, rather than addressing the initial failure. 

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

Key Points

1. Root cause analysis needs to be done properly. A lot of ‘root cause analysis’ presented by internal auditors is poor quality and claims ‘effects’ to be ‘root causes’ – it does not get to the underlying root cause.
2. An internal auditor who does not perform root cause analysis on their observations to arrive at the best possible recommendation is not providing their audit client with the best possible internal audit service and is not adding value.

Relevant Industries

Level of Assumed Knowledge