As an audit aficionado, my viewpoint has kept on transitioning over time. For instance, while in school, my perception was that audit encompasses entirely reporting fraud as the main objective. Progressively, with some iota of knowledge about the profession, a consistent approach that is based on standard recurrent procedures while executing audits became quite visible. However, just as much as we all grow into the profession, it is utterly evident that in recent years, there has been a shift towards a more proactive and value-added approach in the profession.
This narrows down to a common term, “root cause analysis”. Let us rewind for a moment. Traditionally, auditors focus on identifying deficiencies and gaps in processes and controls that are likely to affect financial statements and at a comprehensive level, the governance, risk assessment, and compliance structure of an organization. However, for auditors operating in a highly volatile business environment, the opportunity lies in recognizing the value of incorporating root cause analysis techniques in operations. But then, how plausible are we able to integrate problem-solving in financial reporting? Precisely, this places more emphasis on digging deeper into the underlying causes of problems or deficiencies and going beyond surface-level observations and quests for the fundamental reasons behind them – “Treat the cause rather than the symptom”. By focusing on the root cause of issues identified during an audit, it is conceivable to pave the way for more effective problem-solving and reporting allowing for a more comprehensive understanding and potential solutions.
Notably, implementing analytical-based audits that prioritize significant issues impacting financial statements would result in more targeted and valuable reporting. Just like a gardener uproots a weed from the root to eliminate the problem, comprehensive reporting aims at solving issues at its core. for instance, if it is tax compliance and the entity did not file VAT returns on time, the recommendation would be inclusive to a point that it resolves the event from recurrence. In a scenario that the finance officer had overstayed their leave, then the recommendation would be that the entity should train more officers that can dive in when need be, and perform the task hence alleviating the problem.
By integrating problem-solving into the reporting process, it’s probable that we will be able to provide meaningful insights, recommendations, and actions to address the identified issues. However, this does come with some challenges. It requires a shift in mindset and a commitment to invest time and resources into conducting thorough analyses. Perhaps a need to whet analytical skills and collaborate closely with stakeholders to identify and address root causes effectively while incorporating root cause analysis methodologies and tools would yield results.
In conclusion, By shifting the focus from purely reporting issues to understanding and solving problems, there is a possibility of providing more valuable insights, driving positive changes, and contributing to overall organizational success. However, the query in all this is,- “Could this be a defiance against the established system/ structure or a culture of evolvement?
By Abigaba Chrispus
