A summary of the assessments over the year is prepared; several points are extracted that are relevant as:
- Potential Individual Recommendations (IRs) to a RO or,
- Part of a trend across the ROs, potential Collective Recommendation (CR), or best practice.
- Trending items may also be relevant as proposed changes to the audit requirements.
- Issues that can also relate to opportunities for improvement to be raised with the audit bodies during QACE annual meetings, at the November end-user workshop and during the auditor seminar in January of each year.
In February of each year, the ROs provide QACE with a three-year trend analysis of the ACBs’ audit findings. Last year’s report addressed how ROs can obtain the most effective analysis, to identify weaknesses in their processes, systems and controls and opportunities for improvement. QACE employs the same technique in constructing its recommendations for each RO every second year.
The analysis should not just be the number of findings each year and the system categories they fall into but should include closer investigation of a trend’s individual findings to identify root causes. Only in this way can the RO obtain the information to determine the effect and risk and identify effective actions.
An organisation should always know more about its own strengths and weaknesses. Applying root cause analysis to the results of internal audit findings will provide useful verification of the external audit findings analysis results.
Future years’ analyses showing reduced numbers of associated findings can demonstrate the effectiveness of previous corrective actions. A stable implementation of audit finding trends analysis is an important management review input and an essential tool for the identification of internal audit focus issues and key performance indicators (KPIs).
The RO’s analysis of its own internal audit findings will support and validate the external audit findings, leading to reliable data driven decision making and increasingly effective processes and products. Products in our business include fully competent staff, consistently delivered surveys, audits and inspections to the highest standard, and accurate reports and certificates.
The content and effectiveness of the ROs’ 2019 trend analysis showed good improvements, with some ROs having developed highly effective implementations. Without a proper analysis there can be no identification of effective corrective actions and therefore there is limited benefit to the RO.