Stuart Brown
Head of Technical & Compliance, Director of Duncan & Toplis

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Stuart is director and head of technical and compliance at Duncan & Toplis. Stuart leads the technical developments for the business, including auditing, financial reporting, and quality assurance. It supports the continuous improvement of our processes using the Lean Six Sigma methodology.

In 2021, Stuart was appointed to Duncan & Toplis’ operations board and became a member of the ICAEW’s influential Ethics Advisory Committee (EAC). As a committee member, he gives advice on complicated or precedent-setting cases and contributes to the development of new guidance and other policy issues.

Root Cause Analysis

July 25, 2022

Have you heard of Root Cause Analysis (RCA)?

In the auditing world, it has recently taken centre stage as audit practices around the globe prepare for the 15 December 2022  – the effective date of the new International Standard for Quality Management auditing standard (ISQM1).

Under the new standard, there is a requirement for auditing practices to use RCA to assist with the practice-wide improvements of audit quality. Prior to this, some national authorities (such as the Financial Reporting Council in the UK) have required firms to perform RCA following audit quality reviews to analyse their findings and attempt to prevent issues from reoccurring once identified.

What is Root Cause Analysis?

The clue is, quite literally, in the name.

Simply put, it is a tool to pinpoint what the root cause of a given situation is. For audit purposes, it may be used to find out why the quality of an audit file was not up to expected standards, or why an audit was not performed as efficiently as it should have been. RCA is especially effective for discovering the underlying cause of issues and can be used in any industry, helping to focus efforts on improving or circumventing the identified problem(s).

I was first introduced to RCA while studying for the black belt qualification in the process improvement methodology known as Lean Six Sigma (LSS). At the core of LSS is the philosophy of continual improvement, a mind-set that every process can be improved. Before something can be improved, we first need to identify what is wrong with it and, importantly, what has caused the issue to begin with.

If we do not know what has caused the issue, how can the issue possibly be rectified? Or avoided in future?

In our firm we have carefully utilised RCA while improving a number of our own internal processes including billing, client onboarding, client communication and workflow methodology.  How?

You can find a wealth of advice online regarding how to perform RCA, here I’d like to provide a brief overview of how we approach it at Duncan & Toplis.

What’s the problem? Effective RCA implementation

Firstly, you need to identify exactly what issue you are investigating.

Do not try to just jump straight into high-level issues. For example, avoid starting an RCA meeting on the premise that “our customers don’t like the new widget”. Some preliminary investigation is needed here. Does it not work? Is it manufactured too slowly? Is it too expensive? Clearly, defining the issue will help to focus the analysis.

Secondly, collect the required data. Once the issue has been defined, obtain the required data and compare it to a measurable expectation. For example, the production of a widget may be too slow for customers. Set an expectation of how long production should take and compare this to the actual time it is taking. In this case, you may then want to obtain the times between each stage of the production process to better highlight production bottlenecks.

Next, arrange an RCA meeting. This should involve all key stakeholders of the process or project. Ideally, the meeting should be coordinated by someone independent of the process / project under review to ensure that the conversation is focussed and remains entirely objective.

Asking a lot of “Whys”

We tend to start the conversation with the broad question of “Why?”.

Why is X not happening in Y? Keep asking “why?” until there is consensus in the group as to the specific root cause of an issue. This is why RCA is sometimes referred to as the ‘5 whys’. Think of the questioning nature of toddlers! The data collected in the previous stage can provide effective evidence for the conclusions reached.

Of course, meetings may not run so smoothly. If that is the case, the conversation can be focussed through the use of several different models. For example, the Ishikawa (or fishbone) diagram is something that we utilise at Duncan & Toplis. This enables different potential causes of an issue to be visually represented and funnels the conversation into different categories, such as equipment, process, people, materials, environment and management.

Once the root cause of an issue has been identified, targeted solutions can be implemented to resolve the issue.

Sometimes, the team may conclude that there are two or more issues that equally appear to be the root causes of an issue. In this case, pick a solution to focus on one cause and review the outcome. If that does not work, move on to the next cause until improvements are seen. Do not attempt to remedy both in tandem as this will impact your ability to measure the individual success of both measures.

This is a very brief overview of Root Cause Analysis, but hopefully, it has given you a taste to investigate further and to help you to strive towards process perfection!

If there are ongoing issues with processes in your business have you considered undertaking a root cause analysis?

Speak to your nearest Kreston member firm or contact for help to find a specialist in your location.