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A test of the accuracy of probability assessment techniques in auditing *
Author(s) -
ABDOLMOHAMMADI MOHAMMAD J.,
BERGER PAUL D.
Publication year - 1986
Publication title -
contemporary accounting research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.769
H-Index - 99
eISSN - 1911-3846
pISSN - 0823-9150
DOI - 10.1111/j.1911-3846.1986.tb00631.x
Subject(s) - statistics , audit , test (biology) , mathematics , bayesian probability , sample (material) , prior probability , psychology , econometrics , computer science , accounting , economics , paleontology , chemistry , chromatography , biology
. Sixty‐two practising auditors participated in an account balance estimation experiment. Having been provided with written and oral training material, they used four elicitation techniques (CDF, PDF, EPS, and HFS) to quantify their subjective beliefs regarding the accounts receivable balance of an audit case study. Their responses were compared to the results of a 600 sample simulation study, using the quadratic scoring rule. Their responses were also compared to the consensus distribution of all subjects using the Kolmogorov‐Smirnov measure. The results indicated that PDF is the elicitation technique generating the most accurate prior probability distribution for use in Bayesian analysis. The other three elicitation techniques were about equal in the degree to which they were less accurate than the PDF technique.