（2004）Discussion of supporting continuous monitoring using control charts.pdfVIP

International Journal of Accounting Information Systems 5 (2004) 131– 134 Discussion Discussion of supporting continuous monitoring using control charts Mark C. Davies * KPMG LLP, Commerce Court West, 199 Bay Street, Toronto, ON, Canada M5L 1B2 Received 1 January 2004; accepted 1 January 2004 As an audit practitioner, I found the concept of using control charts in monitoring systems of financial controls intriguing. The idea of applying an established manufacturing analysis technique to financial information is refreshing in that the step from theory to practice is more readily understandable than some of the more ‘‘theoretical’’ papers I have read in the past. However, one must remember that I am speaking as a practitioner. I found myself drawn to the last sentence of the paper: Currently, the usefulness of the concept is probably highest for auditors, internal and external, as an additional analytical review procedure. Ultimately, as companies increase the frequency of reporting, the concept also may be beneficial to other decision-makers, through the identification of systemic problems within an organization. It is around this premise that I will organize my comments. Specifically, what are the implications of control charts as a financial monitoring tool for external auditors, internal auditors, and management? 1. External auditors The most significant assumption within the paper, the one that provides the most practical concern in the implementation of controls charts as described, is the requirement for frequent financial reporting to facilitate continuous auditing. The examples provided in the paper demonstrate the ability of control chart