Validation of an accounting expert system for business combinations


This article presents the five stages involved in the construction of a knowledge-based system using VP-EXPERT, with emphasis on the final step, knowledge validation. The knowledge-based system, called PURPOOL, enables the user to determine the proper accounting treatment for a business combination. PURPOOL can be used effectively by educators as a pedagogical device to teach their students how to account for business combinations. PURPOOL also can be used by accounting practitioners in training inexperienced staff accountants or in determining the proper accounting treatment of actual problems encountered in practice. PURPOOL is one of the first GAAP-based expert systems reported in the accounting literature. A GAAP-based system relies upon the current authoritative accounting literature (Financial Accounting Standards Board Statements, Accounting Principles Board Opinions, etc.) for the knowledge base rules. PURPOOL captures the content of APB Opinion No. 16, Business Combinations in its knowledge base. The validation of PURPOOL utilized a framework consisting of nine elements. This process included interaction with a human expert, review of the accounting literature pertaining to business combinations, development of test cases, consultations with audit seniors from a regional accounting firm, and consultations with accounting information systems and advanced accounting professors. As a result of using the framework, a thorough validation of the system was accomplished, and that process is described in this article. © 1994.


School of Accountancy

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Expert Systems With Applications