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APX: An Integrated Knowledge‐Based System to Support Audit Planning

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  • Anandhi Bharadwaj
  • Vijay Karan
  • Radha K. Mahapatra
  • Uday S. Murthy
  • Ajay S. Vinze

Abstract

Auditors who must express an opinion on the financial statements of publicly held enterprises must perform a series of risk assessments as the basis for selecting appropriate audit procedures to be performed. Although many auditing expert systems have been developed for individual components of the audit risk assessment process such as inherent and control risk assessment, none integrate these assessments to arrive at the ultimate objective of assessing the allowable level of detection risk which drives audit procedure selection. This paper discusses critical design concerns for audit planning expert systems in light of the integrated nature of the steps involved in the audit planning process. The design and development of an integrated audit planning expert system called APX (Audit Planning eXpert) is also discussed. A distinguishing feature of APX is that it not only performs the individual types of risk assessments but it also integrates the resulting assessments to arrive at allowable detection risk. The knowledge acquisition and system development process are described to illustrate some of the mechanics of developing such a system.

Suggested Citation

  • Anandhi Bharadwaj & Vijay Karan & Radha K. Mahapatra & Uday S. Murthy & Ajay S. Vinze, 1994. "APX: An Integrated Knowledge‐Based System to Support Audit Planning," Intelligent Systems in Accounting, Finance and Management, John Wiley & Sons, Ltd., vol. 3(3), pages 149-164, August.
    • Handle: RePEc:wly:isacfm:v:3:y:1994:i:3:p:149-164
    DOI: 10.1002/j.1099-1174.1994.tb00063.x
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    References listed on IDEAS

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    1. David Murphy & Carol E. Brown, 1992. "The Uses of Advanced Information Technology in Audit Planning," Intelligent Systems in Accounting, Finance and Management, John Wiley & Sons, Ltd., vol. 1(3), pages 187-193, September.
    2. Jeff Delisio & Maureen McGowan & Walter Hamscher, 1994. "PLANET: An Expert System for Audit Risk Assessment and Planning," Intelligent Systems in Accounting, Finance and Management, John Wiley & Sons, Ltd., vol. 3(1), pages 65-77, January.
    3. James M. Peters, 1992. "Knowledge Representation Issues in Complex Decision Domains: an Example from Inherent Audit Risk Assessment," Intelligent Systems in Accounting, Finance and Management, John Wiley & Sons, Ltd., vol. 1(1), pages 9-20, January.
    4. Peters, Jm, 1990. "A Cognitive Computational Model Of Risk Hypothesis Generation," Journal of Accounting Research, Wiley Blackwell, vol. 28, pages 83-103.
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