Computational Models as a Knowledge Management Tool: A Process Model of the Critical Judgments Made during Audit Planning.

Effective management of knowledge is essential for a CPA firm to remain competitive. Use of computational models of judgment processes and outcomes causes knowledge to be available for use and analysis. We present a comprehensive and integrated computational model of the difficult and knowledge-intensive judgments needed for successful audit planning. The model concludes on a client's going-concern status, applicable levels of inherent, control, and planned detection risk, and appropriate levels of statement- and account-level materiality. Most importantly, the model validly identifies the cause of significant fluctuations given causal hypotheses. The context is the sales and collection cycle of a manufacturing client. The model consistently replicates causal hypothesis judgments generated by the modeled auditor who exhibits considerable judgment expertise, i.e., his[1] judgments typically coincide with actual causes. Concerning judgment expertise, the model reveals numerous linkages among judgments, subtle interdependencies in cue importance across judgments, and new findings concerning cue diagnosticity. [ABSTRACT FROM AUTHOR]