Opportunities for artificial intelligence development in the accounting domain: the case for auditing

Baldwin, Amelia A.; Brown, Carol E.; Trinkle, Brad S.

doi:10.1002/isaf.277

Cited by 83 publications

(54 citation statements)

References 53 publications

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“…The nature of the audit, which addresses the accounting review of companies in many different industries, with a great a number of variables to be analysed, and with high information processing costs, encourages the use of artificial intelligence techniques, which means that they should be investigated to the maximum extent possible [3]. Therefore, this paper intends to develop an audit opinion prediction model capable of improving the results achieved by prior research, reducing the margin of error of the existing models.…”

Section: Introductionmentioning

confidence: 99%

Integrating corporate governance and financial variables for the identification of qualified audit opinions with neural networks

Fernández-Gámez

Garcìa-Lagos

Sánchez-Serrano

2015

Neural Comput & Applic

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Prior studies have contributed to the development of models that help predict audit opinions, and have applied several methodologies in the search of better predictions. Nevertheless, and even though the existing literature on the prediction of audit opinions is profuse, the results achieved by the existing modelling are still considerably far from having obtained high levels of prediction, and the results are not in excess of 80 % in terms of classification. In previous research, prediction models of audit opinions have used financial variables. The main contribution of this paper is to show that combining these financial variables with variables relating to corporate governance of companies, the predictive ability of the models is significantly higher. For this, a sample was selected from Spanish Listed companies during the financial years between 2008 and 2010. From this sample, financial and corporate governance information was obtained, enabling us to rely on a new set of variables, more complete than those used in prior research. The validity of the variables was studied by means of univariant tests, upon completion of the database. Then, the results of the models built upon said variables were compared through neural network tests that have proven to yield a higher level of prediction, according to prior literature, specifically, multilayer perceptron and probabilistic neural network.

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Section: Introductionmentioning

confidence: 99%

Integrating corporate governance and financial variables for the identification of qualified audit opinions with neural networks

Fernández-Gámez

Garcìa-Lagos

Sánchez-Serrano

2015

Neural Comput & Applic

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“…The adaptation of artiicial intelligence and machine-learning technologies into the areas of accounting and inance, and auditing is one of the areas of particular interest to businesses in the era we are in [45,46]. A total of 1663 artiicial intelligence initiatives, with a total investment of $12.35 billion [47], have been taken in 70 countries.…”

Section: Artiicial Intelligence and Accountingmentioning

confidence: 99%

“…With the technology, invoices are automatically detected, their types are determined, tax processes are managed, records are made and the system develops itself by learning from past processes [51]. The use of artiicial intelligence systems in accounting applications is one of the topics that the accounting academicians have studied for a long time [46,[52][53][54]. It is now apparent that these studies have been adopted by start-ups and big enterprises and contributed to the transformation of the profession.…”

Section: Artiicial Intelligence and Accountingmentioning

confidence: 99%

The Future of Accounting Profession in an Era of Start-Ups

Özdoğan¹

2017

Accounting and Corporate Reporting - Today and Tomorrow

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With the help of the advancements in the ield of communication and information technologies, the number of IT-based software has rapidly increased and the capabilities of high-budget enterprise resource planning (ERP) software widely used by large enterprises have begun to be ofered to small and medium-sized enterprises (SMEs). In this chapter, cloud computing and other information technologies based accounting start-ups are covered, and the efects of these highly increasing start-ups on the profession of accounting have been addressed. In conclusion, it has been predicted that technology-based accounting start-ups with both accounting professionals and entrepreneurs having an expertise on information technologies will come together and will increase in the future, and cloudbased accounting initiatives will shape the future of the profession.

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“…Examples include identification of risks, appraisal of controls, and planning/assessment of control and substantive tests [Hunton and Rose, 2010]. Audit research has a long and rich history of using artificial intelligence (AI)-based techniques [Bailey, Duke, Gerlach, Ko, Meservy, and Whinston, 1985;Baldwin, Brown, and Trinkle, 2006;Changchit, 2003;Davis, Massey, and Lovell, 1997;Denna, Hansen, Meservy, and Wood, 1992;Gadh, Krishnan, and Peters, 1993;Kelly, 1985;Looi, Tan, Teow, and Chan, 1989]. A common weakness of expert systems is their lack of completeness in terms of covering the various aspects of an internal control system [Krishnan, Peters, Padman, and Kaplan, 2005].…”

Section: Volume 31mentioning

confidence: 99%

A Model for Investigating Internal Control Weaknesses

Guan¹,

Levitan²

2012

CAIS

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Scandals in corporate finance in the early 2000s and subsequent policy changes led corporate executives to adopt a more risk-based approach in corporate governance. Therefore, identification and assessment of risks became extremely important. Risk assessment poses a particular challenge for auditors due to the highly complex structure and processes of internal control systems. Extant research in this area mostly focused on probabilistic models and expert systems that capture and model heuristic knowledge. However, evidence suggests that knowledge of the structure of the internal control system is also essential. There is relatively little research that focuses on the modeling of the structural aspects of financial processes and their internal control systems as a means of helping corporate executives and auditors perform their respective tasks of risk management and assessment. This article proposes an approach to risk management and assessment in internal control systems that models the structure and financial processes of an internal control system. The model uses a directed graph to represent the various elements in an internal control system, such as financial statement assertions, control activities, financial processes, and the causal relationships that exist among these elements. The article demonstrates the usefulness of the model by presenting and discussing algorithms based on this model to help corporate executives manage risk and to help internal and external auditors assess risk, for designing substantive testing and for tracing sources of errors.

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Opportunities for artificial intelligence development in the accounting domain: the case for auditing

Cited by 83 publications

References 53 publications

Integrating corporate governance and financial variables for the identification of qualified audit opinions with neural networks

Integrating corporate governance and financial variables for the identification of qualified audit opinions with neural networks

The Future of Accounting Profession in an Era of Start-Ups

A Model for Investigating Internal Control Weaknesses

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