Abstract

Abstract: This research paper presents a novel approach to predict audit risks using a neural network model. The dataset used for this study was obtained from Kaggle and comprises 774 samples with 18 features, including Sector_score, PARA_A, SCORE_A, PARA_B, SCORE_B, TOTAL, numbers, marks, Money_Value, District, Loss, Loss_SCORE, History, History_score, score, and Risk. The proposed neural network architecture consists of three layers, including one input layer, one hidden layer, and one output layer. The neural network model was trained and validated, achieving an impressive accuracy of 100% and an average error of 0.000015, indicating its robust predictive capability. Moreover, we conducted feature importance analysis to identify the most influential features for predicting audit risk. The key features found to be critical for classifying fraudulent activities in audit risk prediction are Sector_score, PARA_A, SCORE_A, PARA_B, SCORE_B, TOTAL, numbers, marks, Money_Value, District, Loss, Loss_SCORE, History, and History_score. This research contributes to the field of audit risk prediction by demonstrating the effectiveness of a neural network-based approach and highlighting the importance of specific features in detecting fraudulent activities. The findings have significant implications for auditors and organizations seeking to enhance their audit risk assessment processes, ultimately leading to improved financial transparency and fraud detection.