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Inferring About the Average Value of Audit Errors from Sequential Ratio Tests

  • University of Economics in Katowice

Research output: Contribution to journalArticlepeer-review

3 Citations (Scopus)

Abstract

The book amounts are modeled as values of a random variable, represented by a mixture of distributions of both the correct and error-contaminated amounts. The mixing coefficient represents the proportion of items with non-zero error amounts. This study addresses the problem of determining the sample size needed for testing statistical hypotheses regarding mean accounting errors. The average sample size is estimated using the Sequential Probability Ratio Test (SPRT), applying the Monte Carlo method. Estimating average audit errors is a common challenge in economic research.

Original languageEnglish
Article number998
JournalEntropy
Volume26
Issue number11
DOIs
Publication statusPublished - Nov 2024

Keywords

  • Monte Carlo method
  • mixture of probability distribution
  • sequential likelihood ratio test

ASJC Scopus subject areas

  • Information Systems
  • Mathematical Physics
  • Physics and Astronomy (miscellaneous)
  • General Physics and Astronomy
  • Electrical and Electronic Engineering

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