Audit Risk Assessment Based on Case-Based Reasoning Model in an Extended Environment

The complexity of contemporary business organizations has caused the audit profession to radically alter their audit process over the past decade. Because of the impact of e-business partnerships, outsourcing and co-sourcing relationships, and co-dependence with business partners on the extending of the business risk faced by a client, auditors have to alter their procedures in accordance with this vision, and adopt some new methods to assess audit risks. This study presents a case-based reasoning approach to support auditors to assess audit risks in an extended environment. Case-based reasoning performs similarity-based matching to find the most similar case in case base to the new problem. The method presented is applied to data of audit cases of an accounting firm.