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Control chart

A control chart is a graphical tool used to monitor process changes over time, consisting of a central line, upper control limit, and lower control limit. It helps auditors identify patterns, detect variations indicating errors or fraud, and assess process stability. Control charts can display various data distributions, providing insights into process behavior, and are valuable for improving controls and optimizing performance.

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Control chart

A control chart is a graphical tool used to monitor process changes over time, consisting of a central line, upper control limit, and lower control limit. It helps auditors identify patterns, detect variations indicating errors or fraud, and assess process stability. Control charts can display various data distributions, providing insights into process behavior, and are valuable for improving controls and optimizing performance.

Uploaded by

n29786569
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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What is a Control Chart?

A control chart is a graphical tool used to monitor and analyze how a process changes over
time. It helps determine whether a process is stable and operating within acceptable limits.

A typical control chart consists of:

1. Central Line (CL) – The average (mean) value of the process.

2. Upper Control Limit (UCL) – The maximum acceptable value based on historical data.

3. Lower Control Limit (LCL) – The minimum acceptable value based on historical data.

Data points are plotted over time, allowing analysts to see trends, fluctuations, or deviations that
indicate whether the process is in control (stable) or out of control (unstable).

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How Control Charts Help Auditors

Auditors can use control charts to:

Identify patterns and trends in the data.

Detect unusual variations that may indicate errors or fraud.

Determine if a process is stable or needs improvement.

By using control charts, auditors can go beyond just reviewing transactions—they can assess
process stability and performance over time.

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Types of Data Distributions in Control Charts

Control charts can display different types of data distributions, which provide insight into how the
process behaves:
1. Normal (Symmetric/Unimodal Distribution)

The data is evenly distributed around the mean, forming a bell-shaped curve.

Indicates a stable and predictable process.

2. Skewed Left (Negatively Skewed Distribution)

More values are concentrated on the right side, with a longer tail on the left.

May indicate process delays or bottlenecks.

3. Skewed Right (Positively Skewed Distribution)

More values are concentrated on the left, with a longer tail on the right.

Could indicate quality issues or unexpected spikes in demand.

4. Bimodal Distribution

Two peaks in the data suggest two different groups or factors influencing the process.

Example: A hospital's patient wait times may show two peaks due to separate morning and
evening rush periods.

5. Multimodal Distribution

More than two peaks, indicating multiple factors affecting the process.

Example: A manufacturing process with multiple production shifts could lead to varying output
levels.
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Conclusion

Control charts are essential tools for tracking and analyzing process performance over time.
They help process owners and auditors:

Monitor process stability

Detect errors and anomalies

Understand patterns in data distribution

Although widely used in quality control, control charts are underutilized by auditors, even though
they provide valuable insights into process efficiency. By incorporating control charts into audits,
businesses can proactively improve controls, minimize risks, and optimize performance.

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