Inferring About the Average Value of Audit Errors from Sequential Ratio Tests
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...
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MDPI AG
2024-11-01
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| Series: | Entropy |
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| Online Access: | https://www.mdpi.com/1099-4300/26/11/998 |
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| author | Grzegorz Sitek Mariusz Pleszczyński |
| author_facet | Grzegorz Sitek Mariusz Pleszczyński |
| author_sort | Grzegorz Sitek |
| collection | DOAJ |
| description | 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. |
| format | Article |
| id | doaj-art-475b4235d61b45f8ba1feb1cdafcb017 |
| institution | Kabale University |
| issn | 1099-4300 |
| language | English |
| publishDate | 2024-11-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Entropy |
| spelling | doaj-art-475b4235d61b45f8ba1feb1cdafcb0172024-11-26T18:03:22ZengMDPI AGEntropy1099-43002024-11-01261199810.3390/e26110998Inferring About the Average Value of Audit Errors from Sequential Ratio TestsGrzegorz Sitek0Mariusz Pleszczyński1Department of Statistics, Econometrics and Mathematics, University of Economics in Katowice, ul. 1 Maja 50, 40-287 Katowice, PolandDepartment of Mathematics Applications and Methods for Artificial Intelligence, Faculty of Applied Mathematics, Silesian University of Technology, 44-100 Gliwice, PolandThe 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.https://www.mdpi.com/1099-4300/26/11/998sequential likelihood ratio testmixture of probability distributionMonte Carlo method |
| spellingShingle | Grzegorz Sitek Mariusz Pleszczyński Inferring About the Average Value of Audit Errors from Sequential Ratio Tests Entropy sequential likelihood ratio test mixture of probability distribution Monte Carlo method |
| title | Inferring About the Average Value of Audit Errors from Sequential Ratio Tests |
| title_full | Inferring About the Average Value of Audit Errors from Sequential Ratio Tests |
| title_fullStr | Inferring About the Average Value of Audit Errors from Sequential Ratio Tests |
| title_full_unstemmed | Inferring About the Average Value of Audit Errors from Sequential Ratio Tests |
| title_short | Inferring About the Average Value of Audit Errors from Sequential Ratio Tests |
| title_sort | inferring about the average value of audit errors from sequential ratio tests |
| topic | sequential likelihood ratio test mixture of probability distribution Monte Carlo method |
| url | https://www.mdpi.com/1099-4300/26/11/998 |
| work_keys_str_mv | AT grzegorzsitek inferringabouttheaveragevalueofauditerrorsfromsequentialratiotests AT mariuszpleszczynski inferringabouttheaveragevalueofauditerrorsfromsequentialratiotests |