Modelling Audit Risk Assessments: Exploration of an Alternative to the Use of Knowledge-based Systems

This paper compares decision-modelling approaches. The decision modelled is the assessment of inherent and control risk in the purchases, accounts payable and inventory cycle. It is modelled using two different approaches. Firstly, knowledge-based models are constructed using established development shells. Secondly, a model is constructed using a conventional procedural programming language. Both modelling approaches are tested against the output of human practitioners and compared to each other to determine if the more restrictive, assumption-laden approach offered by the procedural model is adequate to deal with the decision problem under examination, or if the greater flexibility offered by the knowledge-based approach is required. This comparison yields positive results. The procedural model is able to reproduce satisfactorily the output of the human decision makers and the knowledge-based models for the chosen decision problem. This result emphasises the importance of devoting time to the selection of the most appropriate modelling approach for a given decision problem.