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  3. you have been hired by mr. mittal to determine whi

You have been hired by Mr. Mittal to determine which of the following accounts receivable...

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Question

Accounting

  1. 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:
    1. Analytic review
    2. Confirmations
    3. Test of subsequent collections (receipts)

The three criteria used to distinguish between procedures are as follows:

  1. Reliability
  2. Cost
  3. 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.

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