VALIDATION OF AN ACCOUNTING EXPERT-SYSTEM FOR BUSINESS COMBINATIONS

This article presents the five stages involved in the construction of a knowledge-based system using VP-EXPERT, with emphasis on the final s tep, knowledge validation. The knowledge-based system, called PURPOOL, enables the user to determine the proper accounting treatment for a b usiness combination. PURPOOL can be used effectively by educators as a pedagogical device to teach their students how to account for busines s combinations. PURPOOL also can be used by accounting practitioners i n training inexperienced staff accountants or in determining the prope r accounting treatment of actual problems encountered in practice. PUR POOL is one of the first GAAP-based expert systems reported in the acc ounting literature. A GAAP-based system relies upon the current author itative accounting literature (Financial Accounting Standards Board St atements, Accounting Principles Board Opinions, etc.) for the knowledg e base rules. PURPOOL captures the content of APB Opinion No. 16, Busi ness Combinations in its knowledge base. The validation of PURPOOL uti lized a framework consisting of nine elements. This process included i nteraction with a human expert, review of the accounting literature pe rtaining to business combinations, development of test cases, consulta tions with audit seniors from a regional accounting firm, and consulta tions with accounting information systems and advanced accounting prof essors. As a result of using the framework, a thorough validation of t he system was accomplished, and that process is described in this arti cle.