Monitoring is conceptually similar to reviewing, but differs in a couple of key respects. First, review activity typically takes place using historical data after a business cycle is complete, while monitoring occurs on a continuous basis with the latest available data. Second, because the subject of a review is typically historical in nature, the audit requirements involved should be expected to be greater than those for data being monitored. (This is not to imply that inaccuracy in any data should be considered acceptable.)
Previously, we noted that the subject of a review process is typically a report. Although you can use reports for monitoring purposes as well, a report may not be the best medium for monitoring. Most managers flip their P/L or income statement to the section of greatest interest to them. The higher up the organizational chart they sit, the farther back in the report they go. Similarly, department heads will focus more keenly on the parts of the report that concern their parts of the business. Given this tendency, it makes good sense to provide those who monitor business processes with only the specific data they need. This leads to the notion of key performance indicators, or KPIs, which we will discuss in greater detail in a future article.
Next Topic: Extrapolate
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