Fraud

Subsequent to the issuance of SAS No. 47, several different speak toes to maturation a model of audit risk and of the ARM frivol away been presented. For example, Srivastava et al. (1996) use a ruling-functions material to model the audit cooking and evaluation process for accounts receivable for a health shell out unit. In doing so, they evince the viability of Auditors Assistant, an expert parry shell to automate the belief functions propagation in networks. In addition, sensitivity analyses were performed to determine the impact of the strength of show up as a function of location in the network, and to investigate the belief of variability in the input strengths on the overall belief on each variable in the network (Srivastava and Lu 2002). 5 Dutta et al. (1998) construe the ARM using a belief-function framework that pictures the risks faced by auditors due to random errors, defalcations (employee fraud) and management fraud. They use up two cases. In the first, they consider only favourable items of evidence and derive an analytical legislation for audit risk. In the second, they consider mixed items of evidence (both affirmative and negative), which models the situation more frequently faced by auditors.

They demonstrate that a serious underreckoning of audit risk can proceed if the ARM is utilize without specifically considering the risks associated with management fraud. Mock, et al. (1998) examine the feasibility of a belief-function approach in assisting auditors in developing a risk-adjusted program plan. Their findings prognosticate that after initial training, the turnout determine of the belief-function mo del accurately reflect the views of an audi! t partner regarding the assurance obtained on the departure in testing the accounts receivable area. Further, sensitivity analyses indicate that output values are insensitive to the use of a flavorless scale to suck out beliefs rather than a numeral scale. Since auditors customarily use categorical...If you desire to get a all-embracing essay, order it on our website: OrderEssay.net

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