CHAPTER 16 AUDITING COMPUTER PROCESSING: EXPERT SYSTEMS Expert Systems can be defined in a simple manner as computer programs that

employ unique programming techniques to provide users within prepackaged expertise in a particular field. BASICS CONCEPTS AND TERMINOLOGY OF EXPERT SYSTEMS The two basic components of the expert system are its knowledge base and its inference engine. Knowledge base contains rules, facts, and information used in formulating a solution; solving problems and helping users reach their goals. Inference Engine is a computer program that contains the analytical framework for generating and explaining advice to the user. User Interference provides the communication between the inference engine and the system user. Explanation Facility helps the user understand why certain questions are asked or why specific conclusions are reached. TERMINOLOGY 1. Information Organization Techniques three techniques used to organize information in the knowledge base include if-then rules, framing and semantic networks. a. If-then rules include a declaration, condition, and an action. Expert systems using the rule representation scheme are sometimes called production systems. b. Framing organize information around expected events. A frame is a group of attributes that describes a given object. c. Semantic Networks are another approach to organizing information. These networks focus on objects and their relationships.

2. Inference Searching Techniques refer to how and the order in which the inference engine will use the knowledge data in the knowledge base. a. Forward chaining develops solutions from facts. It is based on inductive reasoning. b. Backward chaining begins with the results and moves backwards. It is based on deductive reasoning. c. Searching strategies involve describing a desired solution as a goal and the set of possible steps leading from initial conditions to the goal as a search space. 1. Depth-first search follows a single path to its end, reaches a conclusion and then follows another single path if appropriate.

2. Breadth-first search simultaneously examines all paths starting with the first step for each one then moving to the second step for each one. 3. Heuristic search employs rules of thumb to help solve problems by reducing the search space. 3. Expert Systems Personnel among the new terms the computer auditor must contend with in working with expert systems are those identifying various personnel. a. Domain expert is the person who is recognized as having the knowledge and knowhow necessary to solve a particular type or class of problem. b. Knowledge engineer defines the problems to be solved, discovers the basic concepts involved through and extended series of interactions with the domain expert, and loads the information with related rules into the knowledge base. EXPERT SYSTEMS AS A TOOL OF THE AUDITOR 1. Planning the Audit a. Evaluating Audit Risk b. Specify Audit Materiality c. Performing Analytical Procedures 2. Audit Testing a. Evaluating the control structure by performing tests of controls and related activities to assess control risk b. Test of details of transactions and account balance. 3. Issuance of Financial Statements EXPERT SYSTEMS AS A TARGET OF THE AUDIT 1. Expert Systems Processing of Accounting Information- Expert systems used in the processing of accounting information are of two types: a. Systems that directly affect the balances reported in financial statements because they are involve in the processing of significant accounting transactions. b. Systems that indirectly affect the balances reported in financial statements because they provide the auditor with information about the reasonableness of that reported informations 2. Expert Systems Control Structure a. General Controls minimally affected be experts systems technology include: 1. Organization controls, personnel practices, and standard operating procedures. 2. Hardware and systems software controls 3. Systems security controls By: Lopez, Anna Marie Lozada, Jonalyn Tabuac, Luzveminda Tandoc, Cherry Mae Tugade, Donna Grace Zapanta, Julie Ann N81/8-9am