70.2K
Verified Solution
Link Copied!
- You have been hired by Mr. Mittal to determine which of the following accounts receivable procedures should be used in an audit of the BK store:
- Analytic review
- Confirmations
- Test of subsequent collections (receipts)
The three criteria used to distinguish between procedures are as follows:
- Reliability
- Cost
- Validity
The pairwise comparisons matrix for the three criteria is as follows:
| Criterion | Reliability | Cost | Validity |
| Reliability | 1 | 5 | 7 |
| Cost | 1/5 | 1 | 3 |
| Validity | 1/7 | 1/3 | 1 |
The pairwise comparison matrix of the three procedures are as follows:
| | Reliability | |
| Analytic review | 1 | 1/6 | 1/2 |
| Confirmations | 6 | 1 | 4 |
| Test of subsequent collections | 2 | 1/4 | 1 |
| | Cost | |
| Analytic review | 1 | 5 | 8 |
| Confirmations | 1/5 | 1 | 1/2 |
| Test of subsequent collections | 1/8 | 2 | 1 |
| | Validity | |
| Analytic review | 1 | 3 | 2 |
| Confirmations | 1/3 | 1 | 1/5 |
| Test of subsequent collections | 1/2 | 5 | 1 |
Use the AHP to determine which auditing procedure should be used also check the consistency for the first pairwise comparison matrix.
Answer & Explanation
Solved by verified expert
