Bayesian Inference in Auditing with Partial Prior Information Using Maximum Entropy Priors.

ABSTRACT: Problems in statistical auditing are usually one-sided. In fact, the main interest for auditors is to determine the quantiles of the total amount of error, and then to compare these quantiles with a given materiality fixed by the auditor, so that the accounting statement can be accepted or rejected. Dollar unit sampling (DUS) is a useful procedure to collect sample information, whereby items are chosen with a probability proportional to book amounts and in which the relevant error amount distribution is the distribution of the taints weighted by the book value. The likelihood induced by DUS refers to a 201-variate parameter p but the prior information is in a subparameter θ linear function of p , representing the total amount of error. This means that partial prior information must be proc

SUBMITTER: Martel-Escobar M 

PROVIDER: S-EPMC7512506 | biostudies-literature | 2018 Dec

REPOSITORIES: biostudies-literature