Automatic Assessment of Materiality: A Knowledge-based Approach

This paper explores how can a knowledge–based system (KBS) be used in auditing especially when the task requires using professional judgments. It concerned with modeling, implementing and evaluating a KBS called Materiality EXpert (MEX). MEX can assess the level of planning materiality and performance materiality as professionals act. Knowledge used to build MEX is acquired from literature, international standards on auditing, and experienced auditors using questionnaire as well as unstructured and structured interviews. MEX was evaluated by 34 auditors from different audit firms in Egypt including international audit firms. The evaluation results acquired from experienced auditors in Egypt indicated that MEX successfully executes the task of assessing the level of planning materiality and performance materiality. Moreover, MEX is efficient, effective, and acceptable from auditors for assessing the level of planning materiality and performance materiality.