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A note on Bayesian risk models of audit practice

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  • WALLY SMIELIAUSKAS

Abstract

. This note identifies some new issues associated with the use of discrete Bayesian risk models in auditing. The major findings are that for sequential revision, discrete Bayesian risk models may need to be used in a different way than suggested by the professional literature, and some modifications are proposed to the CICA (1980) multiple revision risk model in order to make it more general. Résumé. L'auteur recense certaines questions nouvelles associées à l'utilisation des modèles de risques bayesiens discontinus en vérification. L'étude révèle principalement que dans le cas de l'examen séquentiel, les modèles de risque bayesiens discontinus peuvent devoir être utilisés d'une façon différente de celle que suggèrent les ouvrages spécialisés, et l'auteur propose d'apporter certaines modifications au modèle de risque à révisions multiples de l'I.C.C.A. (1980) afin d'en rendre la portée plus générale.

Suggested Citation

  • Wally Smieliauskas, 1989. "A note on Bayesian risk models of audit practice," Contemporary Accounting Research, John Wiley & Sons, vol. 5(2), pages 720-732, March.
    • Handle: RePEc:wly:coacre:v:5:y:1989:i:2:p:720-732
    DOI: 10.1111/j.1911-3846.1989.tb00735.x
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    1. Smieliauskas, W, 1985. "Sensitivity Analysis Of The Realized Risks Of Auditing With Uncertainty Concerning Internal Control Evaluations," Journal of Accounting Research, Wiley Blackwell, vol. 23(2), pages 718-739.
    2. S. Larsson & G. R. Chesley, 1986. "An analysis of the auditor's uncertainty about probabilities," Contemporary Accounting Research, John Wiley & Sons, vol. 2(2), pages 259-282, March.
    3. Kaplan, Rs, 1975. "Sample-Size Computations For Dollar-Unit Sampling," Journal of Accounting Research, Wiley Blackwell, vol. 13, pages 126-133.
    4. Bailey, Ad & Jensen, Dl, 1977. "Note On Interface Between Compliance And Substantive Tests," Journal of Accounting Research, Wiley Blackwell, vol. 15(2), pages 293-299.
    5. Kinney, Wr, 1975. "Decision-Theory Approach To Sampling Problem In Auditing," Journal of Accounting Research, Wiley Blackwell, vol. 13(1), pages 117-132.
    6. Kinney, Wr, 1979. "Integrating Audit Tests - Regression-Analysis And Partitioned Dollar-Unit Sampling," Journal of Accounting Research, Wiley Blackwell, vol. 17(2), pages 456-475.
    7. Kinney, Wr, 1975. "Decision-Theory Aspects Of Internal Control-System Design-Compliance And Substantive Tests," Journal of Accounting Research, Wiley Blackwell, vol. 13, pages 14-29.
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