A system and method for monitoring a condition of a monitored system. Estimates
of monitored parameters from a model of the system provide residual values that
can be analyzed using a sequential probability ratio test ("SPRT"). The invention
employs empirically derived distributions in the SPRT to provide more accurate
and sensitive alerts of impending faults, breakdowns and process deviations. The
distributions can be generated from piecewise continuous approximation or spline
functions based on the actual distribution of residual data to provide improved
computational performance. The distributions can be provided before monitoring,
or can be updated and determined during monitoring in an adaptive fashion.