Evaluating image quality by using receiver operating characteristic studies is time consuming and difficult to implement. This work assesses a new iterative algorithm using a channelised Hotelling observer (CHO). For this purpose, an anthropomorphic abdomen phantom with spheres of various sizes and contrasts was scanned at 3 volume computed tomography dose index (CTDIvol) levels on a GE Revolution CT. Images were reconstructed using the iterative reconstruction method adaptive statistical iterative reconstruction-V (ASIR-V) at ASIR-V 0, 50 and 70 % and assessed by applying a CHO with dense difference of Gaussian and internal noise. Both CHO and human observers (HO) were compared based on a four-alternative forced-choice experiment, using the percentage correct as a figure of merit. The results showed accordance between CHO and HO. Moreover, an improvement in the low-contrast detection was observed when switching from ASIR-V 0 to 50 %. The results underpin the finding that ASIR-V allows dose reduction.