MULTI-AUDITOR DECISION-MAKING ON INTERNAL CONTROL-SYSTEM RELIABILITY - A DEFAULT REASONING APPROACH

Past research indicates that one of the important issues in multi-audi tor judgment and decision making is the problem of integrating the aud itors' evidence assessments to arrive at a joint opinion. While the au dit judgment processes are not fully understood, it appears that audit ors: (1) develop simple causal models to help identify and explain obs ervations; (2) employ past experience to fill in missing information, that is, they resort to default values unless evidence to the contrary is available; and (3) do not use explicit probability assessments. Ba sed on recent research in knowledge-based systems, this paper proposes a system of evidence sharing and integration which is consistent with the auditors' cognitive processes. The system uses a non-probabilisti c, default reasoning approach to model the process of multi-auditor ju dgment and decision making on internal control system reliability. A t ruth maintenance system assures consistent and complete assessments an d illustrates how conflicts among individual auditor opinions can be r esolved through the process of evidence sharing. The research provides important insights into the practicability of the audit evidence inte gration process by: (1) providing a clear statement of the process; (2 ) demonstrating, by example, the modeling and resolution processes; an d (3) identifying the critical design elements of a practical system. Auditor support systems of this kind can help improve the efficiency a nd effectiveness of the audit process.