Professional Documents
Culture Documents
to Deliver Value
Added Results
January 2014
Speaker Profile
Steven R. Melletz CPA, CIA, CGMA
• Senior Vice President in charge of directing the Financial Audit function at First
Commonwealth Financial Corporation
• Member of the Board of Trustees of the Institute of Internal Auditors – Pittsburgh Chapter
• Former Chief Audit Executive of K-Sea Transportation, a publicly traded Transportation
Company (defunct by acquisition).
• Former Manager at PwC and a BDO Seidman affiliate
• Former FDIC Accounting Technician who audited failed banks for transition to the assuming
banks.
Disclaimer
Anything that I say during this presentation is
my opinion and not necessarily the opinion of
First Commonwealth Financial Corporation, First
Commonwealth Bank, or any of its subsidiaries.
Input 2 Output 2
Process
Step 2
• Criteria
• Condition
• Consequence/Effect
• Cause
• Corrective Action/Recommendation
Five Cs
• Criteria
– The law, regulation, contractual obligation, policy,
procedure, or best practice that is expected to be followed
• Condition
– The factual analysis of the process as it exists
• Consequence/Effect
– Why the issue is important and noteworthy from a
compliance, financial, or operational standpoint.
Five Cs
• Cause
– The root cause which allowed the condition to not emulate
the criteria.
• Corrective Action/Recommendation
– Change that will address the root cause, allow the current
condition to mirror best practice or other criteria and does
not cost more in relation to its effect.
Situation 1 - Wire
• Facts
– Wire was released for $2,828,282,828.28
– Why was it released? Use 5 why’s
Situation 2 – Time Theft
• Facts
– Two workers decided to switch schedules.
– Normally this would be OK if permission was asked, but
that is not what happened in this situation.
Situation 3 – Compensation
• Facts
– Employees paid commission
– Falsified records
Adding Value - Opportunities
• RCA can be used in consulting opportunities
requested by Management, the Audit Committee, by
circumstances resulting from an audit, from many
situations.
• I have received these opportunities from:
– Hotline calls
– H.R. requests
– Legal requests
– Line of Business requests
– Audit Committee requests
Adding Value - How
• Do we create analysis that management does not
currently have available?
• Recommendations that Management has not
considered.
• Advising Senior Management, Audit Committee,
Board of Directors of business risks and issues that
they may not be aware.
• Issues that they may want independently assessed.
Adding Value - How
• Do we create analysis that management does not
currently have available? Maybe it is available, but
they want it to be independently verified.
• Recommendations that Management has not
considered.
• Advising Senior Management, Audit Committee,
Board of Directors of business risks and issues that
they may not be aware.
• Issues that they may want independently assessed.
Adding Value - How
• Ask Management and the Audit Committee if there
are any services you can provide.
• Persuade them that you have the ability to provide
value added services. If you can audit and perform
fraud investigations, you can provide value-added
services.
• Make sure that you are ‘in the know’ of the
Organization’s strategy, objectives, and goals.
• Don’t settle with ‘no’. Go back and inquire
periodically.
Sources
• Email: SMelletz@fcbanking.com
• Phone: 724.463.4707