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Tag Archives: Root Cause Analysis & Culture

Guidance on Auditing Culture and behaviour

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An extract from James Paterson’s latest CPD technical article on the ACCA website. 

It’s time that GRC professionals, regulators and Internal Audit recognised the importance of auditing culture and behaviour – the “soft stuff” 

For the past six years I have been running the IIA UK training on auditing culture, I also helped write the IIA UK guidance on auditing culture. My background is worth explaining: I’m a finance professional, but did a masters’ degree in management (focusing on organisational behavior). I then left finance to work in HR (in leadership development and managing culture change). Then I became a Head of Internal Audit for AstraZeneca for seven years, and since 2010, I have been combining my passion for people and the soft stuff with my love of Internal Audit, doing training and webinars across Europe and further afield.

I am really happy that GRC professionals, regulators and Internal Audit have started to recognise the importance of the soft stuff when it comes to the effective management of risk and maintaining ethical conduct. This was caused – in a large part – by the recognition that many aspects of the financial crisis of 2007-2008 were caused by short-comings in the “bonus culture”, and underestimation of the latent risks building up. In addition, there were mis-selling scandals highlighting poor conduct in sales, which did not put the customer first.

In the UK, the importance of culture and conduct in relation to Internal Audit was formally recognised in a code of practice for Internal Audit in financial services, published in 2013, which said that Internal Audit should consider, when making audit plans: “the risk and control culture” and “the setting of, and adherence to, risk appetite” amongst other areas. In January 2020, the same points have been included in the IIA UK Code of practice for Internal Audit, applying to all sectors and not just financial services.

You can read the rest of this article on the ACCA website

Training & development online/ webinars

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As we adjust to new ways of working I have been working with my friends in the IIA across Europe to deliver engaging webinars on a range of key topics.

Details of internal audit webinars are as follows:

IIA UK:

  • Auditing culture – 9 June
  • Root cause analysis – 10 June
  • Lean and agile audit in the COVID era – 15 June
  • Urgent responses to Covid 19 – 16 June
  • Managing yourself and others in challenging times – 18 June
  • Assurance mapping – 23 June
  • Heads of internal audit – induction masterclass – 24-25 June

IIA BEL:

  • Assurance over GRC – PM 26th May and AM 27th May
  • Lean and Agile Auditing – PM 27th May and AM 28th May
  • Root Cause Analysis – PM 28th May and AM 29th May

IIA Finland:

  • Auditing Culture – PM 1st June and AM 2nd June
  • Assurance Mapping – PM 11th June and AM 12th June

IIA Norway:

  • Lean and Agile Audit in the Covid Era – PM 2nd June and AM 3rd June
  • Assurance Mapping – PM 3rd June and AM 4th June

Timings for split sessions are as follows:
Morning sessions are 09.00 to 12.15 local time
Afternoon sessions are 13.00 to 16.30 local time

E-mail info@RiskAI.co.uk for more information, including tailored training on other topics.

Hope you can join me…

Culture and behaviour and Auditing Culture

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A primer (part 1)

I’ve just run another course on Culture and auditing culture in London with 12 in attendance. This brief article gives a summary of key points concerning common misperceptions, and is offered as a counter-balance to much of what is currently being said about this topic. The second article will discuss specific approaches that, on my analysis, will lead to long-term progress in this arena.

Expectations of those attending

We discussed why people had come to the course and they said:

  • “Our new company is defining its culture, so we want to input to that”;
  • “We have many mergers and acquisitions and see culture issues as businesses try to merge, which we want to better understand”;
  • “We know it’s important, and want to think about a culture audit universe”;
  • “Auditing culture came up as an External Quality Assessment topic, so we want to learn about it”;
  • “Senior stakeholders have been talking about it, so we wanted to know more”;
  • “Our internal audits of risks point to root causes of issues coming from culture, so want to be clearer about what’s going on”;
  • The remaining 6 attendees (50%) explained they had put a culture on their audit plan because it is a current hot topic, and now wanted to be clearer about how to do an audit.
Continue Reading

Root Cause Analysis for Internal Auditors

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I ran another Root Cause Analysis (RCA) workshop this week in London, with participants from the Financial services sector, Oil and Gas and Public sector. All those attending agreed that proper RCA was important to get to the heart of issues and to enable Internal Audit to provide insights, but none had done any formal training of any length on the topic and most had no explicit, consistent, RCA methodology defined.

We explored the root causes of how such an important topic could be relatively neglected, which includes its absence from current IIA standards, and came up with themes that I have heard on many other workshops, ranging from: “As auditors we have a natural instinct about root causes” to “There is limited time during assignments to do a proper RCA” to “Robust RCA would highlight quite sensitive matters and put us into conflict with management”. Continue Reading

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