Deficiencies identified under the new International Standard on Quality Management 1 (ISQM 1) will be expected to be included in RCA activities and so it is becoming more important for audit firms to think about their RCA process, especially where RCA has not previously been performed.
In this article from ICAEW’s Audit and Assurance Faculty, Cheryl Powick, Director at Deloitte, explores RCA methods, drawing on insights from across the industry.
Group and individual interviews with audit teams or process owners are commonly used by audit firms that already perform RCA. The ‘5 Whys’ and ‘Fishbone’ are established techniques used in RCA interviews that help identify the root causes of audit quality issues – or successes. Change analysis can also help analyse the changes and circumstances in an audit environment and can be helpful when there may be multiple causes.
In group interviews, RCA interviewers can observe the audit team’s dynamics, but individual interviews also have their place as collective mindsets can be avoided, as well as providing the opportunity for all points of view to be heard.
Other methods that can supplement interviews with audit teams may also be useful in RCA, and they can prove effective in identifying and prioritising the primary causes where multiple causes are identified. Behaviour surveys and focus groups, for example, may also serve as a good starting point for those firms that have not previously performed RCA.
A behaviour survey or questionnaire can be used to gather insight from audit professionals on various common root causes, such as the culture or environment at the firm, workload, team culture, or reward and recognition. Survey questions are designed to help identify factors that are causing or contributing to audit quality and will ask people to respond to questions about certain behaviours that may have affected the quality of the work they executed, or their emotional or mental well-being.
Such surveys may be most useful when used with various levels of audit professionals (ie, partners, managers and staff) to obtain a wide range of information and perspectives. Results of the survey will be considered together with information obtained through other RCA activities to provide a comprehensive understanding of significant or pervasive causes of audit quality deficiencies.
Surveys can also help identify areas to focus on ahead of interviews with audit teams to drill down and understand why certain behaviours occurred. Conducting surveys at regular intervals can provide an indication of whether previously identified issues remain that may require further action, or that certain behaviours that may have previously existed did not reoccur. Using the data from surveys can help identify where the greatest risk of recurrence of issues may lie to help prioritise actions.
Focus groups can provide an opportunity to brainstorm or explore a particular quality issue across multiple audit teams and gain different perspectives on the causes that contribute issues arising or prevent them occurring. These working sessions can also be focused on common areas of findings or thematic issues across an industry or portfolio rather than on individual engagement issues. They are most effective when they include team members from audit engagements with and without those issues and, where relevant, technical directors and others from the audit quality and risk function. This type of session is helpful in corroborating and enhancing the results of RCA performed for individual engagements and in obtaining insight that can be used to design responsive actions and to pre-emptively help translate good practices and behaviours into other areas of the audit.
RCA can be a positive experience for practitioners, both when reflecting on lessons learned, or when sharing successes, and these different methods and techniques provide variety and make it an interesting experience for both practitioners and the RCA team.
This article follows How to get started with root cause analysis and Action planning and continuous quality management in the faculty’s special Quality Management edition of Audit & Beyond magazine in February, and the follow-up article, Resourcing root cause analysis.
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