Rule-based and case-based reasoning approach for internal audit of bank

Abstract

Banks currently have a great interest in internal audits to reduce risks, to prevent themselves from insolvency, and to take quick action for financial incidents. This study presents an integrated audit approach of rule-based and case-based reasoning, which includes two stages of reasoning, i.e., screening stage based on rule-based reasoning and auditing stage based on case-based reasoning. Rule-based reasoning uses induction rules to determine whether a new problem should be inspected further or not. Case-based reasoning performs similarity-based matching to find the most similar case in case base to the new problem. The method presented is applied to data of internal audits of a bank.