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

The complexity of contemporary business organiza-tions 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.