CPE Session 21: Sunday, August 7, 8:00 AM – 12:00 PM
Accounting Research Opportunities Based
on the Theory of Belief Functions
This Session has been CANCELED
Description/Objectives:
This workshop will introduce the Theory of Belief Functions, demonstrate its practical values, and discuss its research opportunities within accounting, auditing and systems, using real-world examples. The Theory of Belief Functions provides a flexible framework for managing uncertainties where we do not have the necessary knowledge to apply other approaches such as Bayesian inference. In addition, the Theory of Belief Functions offers a number of potential advantages in assessing risks in auditing and assurance service engagements. Concisely stated, belief functions provide a rigorous definition of risk in terms of plausibility. For example, Audit Risk is defined as the plausibility of errors being present in the financial statements. This definition of risk is appropriately conservative and can be operationalized in any risk assessment setting. Belief functions are being used in variety of real-world settings, such as remote sensing in agriculture and in the ocean, assessing risk in water treatment, forecasting demand for mobile satellites, financial portfolio management, data mining, and image processing in radiology, mostly because of their flexibility in modeling uncertainties and assessing risk. The workshop will conclude with a discussion on the research opportunities for analytical and empirical/behavioral research.
Format/Structure:
The format of the workshop will be a combination of lecture, hands-on experience on simple applications, and case presentations. The following outline will be followed for the workshop:
8:00 – 9:00 Introduction to the Dempster-Shafer Theory of Belief Functions
a. Difference between belief functions and probability
b. Definitions of belief functions and plausibility functions
c. Dempster's rule of combination
9:00 – 10:00 Applications in Accounting, Auditing, and Systems
a. Information Security Risk and Assurance
b. The Risk of Impaired Independence
c. Information Quality
d. Audit and Fraud Risk
10:00 – 10:15 Coffee Break
10:15 – 12:00 Case study and Discussion on Research Opportunities
a. Sketching an evidential network for Lincoln Savings
b. Research Issues related to Measurement
c. Analytical and Behavioral Research Opportunities
Intended Audience:
The intended audience includes both educators and practitioners. The educators will not only benefit by understanding the fundamentals of belief functions and their various applications for their own research, but also by gaining knowledge for dissemination to accounting and systems students. Practitioners will benefit by understanding the value of belief functions in assessing risk for conducting effective and efficient assurance services.
Presenters:
Rajendra P. Srivastava, University of Kansas
Theodore J. Mock, University of Southern California
Sponsor:
Artificial Intelligence/Emerging Technologies Section
* Denotes special requirements or prerequisite
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