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THE APPLICABILITY OF BAYESIAN STATISTICS IN AUDITING
Author(s) -
KNOBLETT JAMES A.
Publication year - 1970
Publication title -
decision sciences
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.238
H-Index - 108
eISSN - 1540-5915
pISSN - 0011-7315
DOI - 10.1111/j.1540-5915.1970.tb00791.x
Subject(s) - audit , bayesian probability , premise , computer science , econometrics , field (mathematics) , bayesian statistics , process (computing) , statistics , data mining , artificial intelligence , bayesian inference , mathematics , accounting , economics , epistemology , philosophy , pure mathematics , operating system
ABSTRACT The basic purpose of this study was the investigation of the usefulness of Bayesian statistical techniques to problems of estimation in the field of auditing. By using subjective probabilities the auditor can explicitly bring prior knowledge to bear on his problem by incorporating his feelings in the sampling process and thus obtain an efficient method by which refined estimates can be obtained. The results of the study strongly support the premise that the auditor can obtain superior results from the Bayesian model in estimating unknown quantities as opposed to those obtained through either the non‐statistical approach or the classical statistical approach.