Andrew D. Bailey

Internal Accounting Controls in the Office of the Future

The law, as well as good business practice, requires adequate internal accounting controls. Modeling and machine analysis of office information systems can ensure compliance.

A conceptual framework for the network approach to expert systems development in auditing

Abstract The process of audit opinion formulation is complex. Before the final opinion decision is reached, the auditor must make a large number of related decisions which contribute to the final opinion decision. We analyze this complex audit decision process as a special case of a more general decision process model. The results of the analysis are used to classify and analyze existing expert systems in auditing. It is clear that the systems proposed to date do not deal with the audit process as a whole, but rather with more limited decisions within an audit. In order to adequately address the complete audit, we propose a network of expert processors. Each processor will deal with a specific decision problem within the context of an audit. However, since the processors can communicate with each other, the separation of the tasks does not adversely affect the aggregation of the information during the audit. The network concept will allow expert systems researchers in auditing to pursue relatively narrow domains of audit knowledge with the assurance that they are contributing to the development of a complete audit expert system.

Multi-auditor cooperation: a model of distributed reasoning

Management and analysis of complex systems frequently involves groups of managers and experts, each working on different parts of the system, cooperating and coordinating among themselves to manage and analyze the system as a whole. The authors propose a distributed reasoning approach to render this process of multiagent cooperation more efficient and effective. They consider, as an example of such a group process, the auditing process in assessing the reliability of an internal control system in which each auditor makes default assumptions about parts of the system being analyzed by other team members. The coordination process is modeled using an assumption-based truth maintenance system, which explicitly represents such assumptions, their possible retractions on subsequent contrary evidence, and changes in the auditors terminal options. The ways in which the resolution of opinions among auditors can be achieved through a process of evidence sharing facilitated by the model are discussed. >

A Way to Wisdom through Service and Relationships

Youth workers and psychologists alike assert the need to address the development of noncognitive assets in education (Gardner, 1983; Goleman, 1995; Pittman et. al, 2003). This call comes in the wake of recent statistics which indicate that academic success and wellbeing are negatively affected by distrust, disinterest, and isolation in the school environment (CASEL, 2002; CDC, 2006). The effort to evade the escalation of negative attitudes and behaviors has taken a turn for the “positive.” Positive youth development and positive psychology present optimal models of thriving that maximize subjective and objective well-being (Ardelt, 2003; Benson & Scales, 2009). One such model is represented in the construct of Wisdom.

A formal algorithmic model compatible with the conceptual modeling of accounting information systems

Abstract Accounting and computer science have been uneasy partners in the development of accounting information systems. The history of their association has generally led end users to do the best they could in matching the needs of accounting systems to the demands of current hardware and software developments. While the results have been impressive, recent developments in computer science make it possible to approach the modeling of accounting information systems in a manner more consistent with the accounting model than previously possible. This paper, motivated by program verification issues from an auditors viewpoint, introduces a functional approach to accounting systems development. The result is a formal algorithmic model of accounting that is consistent with current developments in computer science. A number of benefits are derived from the approach, including: (1) natural representation; (2) ease of coding, design and modification; and (3) verification capabilities.

The Use of Qualitative and Causal Reasoning in Analytical Review Procedures

The use of analytic or quantitative models in auditing is still very limited and often informal. One of the more well developed areas in auditing is the use of models for analytical review. The objective of this research is to extend and apply the current qualitative and causal reasoning technology to accounting, especially analytical review procedures. Qualitative reasoning, initially developed and dedicated to physics, captures the structure, behaviors and the causality underlying the real model. It is believed that the introduction of qualitative and causal reasoning based on an understanding of the business environment can substantially improve intelligent support of current decision support systems.

An OIS model for internal control evaluation

Satisfactory accountability, that is, a control structure which protects corporate assets from theft, misuse, and fraud, is an important aspect of office information system design. The OIS design goals of flexibility, efficiency, and modularity must not preclude the accountability needs of managers, stockholders, and auditors. This will require meticulous examination of the OIS to ensure that it satisfies the multi-attribute control criteria used by auditors.