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A test of the accuracy of probability assessment techniques in auditing

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  • MOHAMMAD J. ABDOLMOHAMMADI
  • PAUL D. BERGER

Abstract

. 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.

Suggested Citation

  • Mohammad J. Abdolmohammadi & Paul D. Berger, 1986. "A test of the accuracy of probability assessment techniques in auditing," Contemporary Accounting Research, John Wiley & Sons, vol. 3(1), pages 149-165, September.
    • Handle: RePEc:wly:coacre:v:3:y:1986:i:1:p:149-165
    DOI: 10.1111/j.1911-3846.1986.tb00631.x
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    6. Solomon, I, 1982. "Probability Assessment By Individual Auditors And Audit Teams - An Empirical-Investigation," Journal of Accounting Research, Wiley Blackwell, vol. 20(2), pages 689-710.
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