Learn about the most effective tool auditors use to pinpoint the most frequently occurring issue in an environment. Discover how Pareto analysis helps prioritize problems.
Table of Contents
Question
Which of the following tools or techniques is most appropriate to help an auditor identify the most commonly occurring problem in a given environment?
A. Histogram.
B. Pareto analysis.
C. Run chart.
D. Scatter diagram.
Answer
A. Histogram.
Explanation
Of the tools and techniques listed, Pareto analysis is the most appropriate for helping an internal auditor identify the most commonly occurring problem in a given environment.
A Pareto analysis, also known as the 80/20 rule, is based on the principle that roughly 80% of effects come from 20% of causes. It is a technique used to identify and prioritize the vital few issues that are causing the majority of problems.
In an audit context, a Pareto chart displays audit findings or non-conformities ranked in order of frequency or severity. This visual representation makes it easy to spot the most significant and recurring problems that should be prioritized for corrective action.
The other tools mentioned, while useful in certain scenarios, are not as well-suited for identifying the most common issue:
- A histogram shows the distribution of data but doesn’t rank issues by frequency.
- A run chart displays data trends over time but doesn’t necessarily highlight the most prevalent problem.
- A scatter diagram is used to identify potential correlations between two variables rather than determining the most frequently occurring issue.
Therefore, Pareto analysis (B) is the best tool among the options provided for an auditor to pinpoint the most commonly occurring problem that needs to be addressed in an environment under audit. By focusing on resolving the vital few issues, auditors can drive the greatest improvements.
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