ABSTRACT
This chapter examines the techniques available to the auditor in order to identify root causes of identified exceptions. Root cause analysis is critical in order to identify those control areas where improvements can prevent problems from occurring. The overall intention is to improve the overall effectiveness of business processes while increasing competitiveness, reducing costs, saving money, and generally keeping customers and stockholders happy. Root cause analysis is an in-depth process or technique involving a structured and thorough review of apparent problem and is used to identify fundamental factors underlying the variation in system performance. Used effectively, root cause analysis can help identify the business or process problems faced, eliminate patching of processes resulting in minor and temporary benefits, and conserve resources by focusing on areas of highest impact. Root cause analysis will be commonly performed when significant or consequential events are occurring particularly when human errors are being repeated during the specific process or when repeated equipment failures are occurring.
