The development of audit detection risk assessment system: Using the fuzzy theory and audit risk model

She I. Chang, Chih Fong Tsai, Dong Her Shih, Chia Ling Hwang

Research output: Contribution to journalArticlepeer-review

33 Scopus citations

Abstract

The result of audit designation is significantly influenced by the audit evidence collected when planning the audit and the amount of audit evidence depends on the degree of detection risk. Therefore, when the assessment factors of detection risk are more objective and correct, audit costs and the risk of audit failure can be reduced. Thus, the aim of this paper is to design an audit detection risk assessment system that could more precisely assess detection risk, comparing with the traditional determination method of detection risk in order to increase the audit quality and reduce the possibility of audit failure. First of all, the grounded theory is used to reorganize 53 factors affecting detection risk mentioned in literatures and then employed the Delphi method to screen the 43 critical risk factors agreed upon by empirical audit experts. In addition, using the fuzzy theory and audit risk model to calculate the degree of detection risk allow the audit staff to further determine the amount of audit evidence collected and set up initial audit strategies and construct the audit detection risk assessment system. Finally, we considered a case study to evaluate the system in terms of its feasibility and validity.

Original languageEnglish
Pages (from-to)1053-1067
Number of pages15
JournalExpert Systems with Applications
Volume35
Issue number3
DOIs
StatePublished - Oct 2008

Keywords

  • Audit risk model
  • Detection risk
  • Fuzzy theory
  • Grounded theory

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