Agent Modeling of Information Assurance

This paper presents a conceptual overview of a simulation experiment involving CPAs and assurance services. In this paper, a simplified situation is developed in which some agents are producers of information and other agents are consumers of information. This type of situation actually models capital markets well, where companies are producing annual reports (information production) and investors are evaluating the reports prior to making investment decisions (information consumption). The CPAgent in the model acts in one of two modes. In the first mode, it can increase the reliability of information production and thereby increase information efficiency. In the second mode, it can promote the relevance of the information to the information consumer, thereby increasing information effectiveness. The model operationalizes continuous auditing through learning. The model is given some additional theoretical interest by appealing to Habermas’ Communicative Action Theory. In this theory, communication between individuals (agents) is seen as being influenced by four validities: performance, sincerity, legitimacy, and truth. In the model, performance and sincerity are affected by the CPAgent’s working with information producers. Legitimacy and truth are two validities that the CPAgent can influence on the information consumer’s side. The paper presents results of simulations run using the above model. Factors that were varied include the information loss function from period to period and the costs of the CPAgents services. Service costs were differentiated between information production assurance costs and information consumption assurance costs. Reputation affects for all three types of agents were also varied. The results indicate a stable model under conditions which are both interesting and realistic. The final section of the paper presents an extension which addresses modeling agents as both information producers and consumers and CPAgents as having aptitude in both efficient information production and effective information consumption activities

Communicative Action In Group Decision Support Systems

This paper addresses some issues of communication in group settings. The contribution of the paper is in relating group decision making to Habermas’ theory of communicative action. This is a rich sociological theory of how communication and distortions of communication occur in social communities. The paper introduces the background of this theory and develops a structure from the theory within which to embed group dynamics. This structure was used to evaluate the results of several group interactions during which masters level students solved a complex case using a prescribed systems methodology. Group membership was manipulated in two ways: first by giving a Myers/Briggs type personality test and second by asking the students to answer questions about their perceptions about the characters and situations appearing in the case. The results reveal that group diversity and homogeneity may after the quality of group outcomes. The paper is divided into five sections. The first section gives some background of Habermas’ theory from the perspective of the philosophy of science. The second develops a specific interpretation of Habermas’ theory for the purposes of this paper. The third describes the individual and group tasks while the forth gives an interpretation of the results. In the final section, some tentative conclusions and directions for further research are discussed

Using Drones in Internal and External Audits: An Exploratory Framework

Recently the FAA relaxed restrictions on the use of drones or Unmanned Aircraft Systems (UASs) for commercial purposes. Markets for commercial drone use are in the technology trigger phase of the Gartner Group’s Hyper Cycle, with developments occurring rapidly in real estate, agriculture (farming), the film industry, insurance, and other areas. Examination and inspection applications of drones have been proposed in heavy industry and cell tower inspection. Previous research suggests an incremental structure for implementing technological innovations such as continuous auditing (CA). In this paper these proposals are expanded to include the additional requirements to add drone technologies. This structure is extended here by (1) defining the use of drones in audit environments, with emphasis on the continuous versus occasional use of drone technologies, (2) extending the technical adoption architecture to include the use of drones, and (3) considering the types of drone usages amenable to both internal and external audits. A specific architecture is proposed here to prototype inventory counts in large warehouses or open-air inventories and that satisfies the suggested requirements. Additionally, this proposal adds value to the current research by extending the discussion of technology adoption in the Alles, Kogan, and Vasarhelyi (2008) paper to include the use of drones in many different audit environments by enumerating the usage types of drones in audit settings and by considering the prototype of such a system

Information Entrophy, Economic Analysis And Financial Reporting

This paper presents a version of entropy theory in economic analysis.  This theory is then used to introduce the notion of the social production of value and to critique the idea of transaction.  Habermas’ theory of communicative action is then employed to understand the production of informational value, a necessary pre-condition to its dissipation.  Finally, some suggestions as to how these concepts might be used to influence standards of financial reporting are entertained