Keywords

auditing, auditing strategies, computational model, review process

Abstract

This study investigated the strategies by which experienced auditors evaluate systems of internal accounting controls. The research method included: (1) observations, using concurrent protocols, of a small sample of practicing auditors performing the internal control evaluation task; (2) extensive interviews with one of the practicing auditors; (3) formalization of auditor processes as a computational model; and (4) validation of the model. The simulation model was Im· plemented as an expert system and tuned to one auditor. The model output consists of a trace of the model processing including: (1) rec• ommendatlons for specific controls to be compliance tested; and (2) a list of management letter issues. The model was tested using new cases and cross-validated against the performance of additional auditors performing the task. A separate group of auditors rated the performance of the computational model and the additional auditors performing the validation task.