Audit Procedure Generation System for Risk-Based Consistency
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Solution Overview
Problem
Current auditing processes lack an integrated system for conducting audits and processing risk-related assessment data to generate and present a suggested audit approach and set of procedures consistently with relevant standards, leading to inefficiencies and inconsistencies.
Innovation Solution
A computer-implemented tool that prompts auditors with a series of questions to determine procedures based on risk assessments, allowing for the generation of tailored audit programs and documents, and providing a user-friendly interface for customization and automation of the audit planning and risk assessment process.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If auditors manually determine audit procedures based on professional judgment and standards, then flexibility and adaptability are maintained, but efficiency and consistency deteriorate
Solution Approach 1:
The patent introduces an intermediary system (audit procedure generation system) that mediates between auditing standards and auditor judgment. This system processes risk assessment data and automatically generates audit procedures, serving as a bridge that translates professional judgment into structured, consistent outputs without eliminating auditor involvement.
Solution Approach 2:
The patent replaces the mechanical manual process of procedure determination with an automated computer-based system. The system uses algorithms to process risk assessment data and generate audit procedures, substituting manual mechanical work with automated computational processes while maintaining audit quality.
2Reliability
If standardized audit procedures are used to ensure consistency, then reliability is improved, but adaptability to specific risk conditions deteriorates
Solution Approach 1:
The patent implements dynamic audit procedures that adapt based on input data. The system generates customized audit procedures by processing specific risk assessment inputs, making the procedures dynamic rather than static. This allows the same system to produce different procedures for different audit scenarios while maintaining internal consistency.
Solution Approach 2:
The patent changes parameters of audit procedures based on risk assessment data. The system adjusts procedure characteristics (such as sampling methods, testing approaches, and documentation requirements) based on the specific risk parameters identified in the audit engagement, enabling customization while maintaining standardization benefits.
3Measurement precision
If comprehensive risk assessment data is collected to improve audit quality, then measurement precision is improved, but loss of time in data collection and processing increases
Solution Approach 1:
The patent performs preliminary risk assessment data collection and processing before final audit procedure determination. By conducting risk assessments early in the audit planning phase and pre-processing the data, the system reduces the time required for later procedure generation and minimizes bottlenecks in the audit process.
Solution Approach 2:
The patent replaces manual data collection and processing mechanisms with automated computer-based systems. The system automatically collects, processes, and analyzes risk assessment data using algorithms, significantly reducing the time required compared to manual processing while maintaining or improving measurement precision.
Data Source
AI summary
The present invention provides a computer-implemented method for automatically generating and placing documents associated with a tax and accounting related engagement, for example assessing risks associated with an audit. A user is presented with a plurality of audit items and a set of risk levels associated with the audit items and may also be presented with a plurality of prompts designed to elicit a set of responses from the user. The set of user responses being associated with a set of risks associated with the audit. The set of risk levels being associated with a set of assertions associated with the audit items and may include first and second risk levels of different degrees. The method further includes processing a set of responses received from the user in response to the items presented. The method includes automatically generating a suggested audit approach that is based at least in part on the processed responses. The method further includes automatically generating documents associated with the suggested audit approach and placing the automatically generated documents within a predefined set of folders. The method may also determine a set of procedures that are based on the responses. The set of procedures are presented to the user based on the suggested audit approach.