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Some empirical evidence on the stability of accounting error characteristics over time

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  • JANE HAM
  • DONNA LOSELL
  • WALLY SMIELIAUSKAS

Abstract

. This paper extends the analysis of previous research to provide evidence on the behavior of error characteristics over time. We find that while, in aggregate, accounting errors tend to be stable over time, the sources of these errors tend to be unstable. Thus, time series modeling of internal controls in external audits may be fruitful only at sufficiently high levels of aggregation. Résumé. Cet article élargit l'analyse contenue dans les recherches antérieures afin de fournir des preuves quant au comportement des caractéristiques des erreurs dans le temps. Nous constatons que bien qu'au total les erreurs comptables ont tendance à étre stables dans le temps, les sources de ces erreurs ont plutôt tendance à varier. Dès lors, la modélisation des séries chronologiques relatives aux contrôles internes dans le contexte de missions de vérification externe ne peut être profitable qu'à des niveaux d'agrégation suffisamment élevés.

Suggested Citation

  • Jane Ham & Donna Losell & Wally Smieliauskas, 1987. "Some empirical evidence on the stability of accounting error characteristics over time," Contemporary Accounting Research, John Wiley & Sons, vol. 4(1), pages 210-226, September.
    • Handle: RePEc:wly:coacre:v:4:y:1987:i:1:p:210-226
    DOI: 10.1111/j.1911-3846.1987.tb00664.x
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    References listed on IDEAS

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    1. Ijiri, Y & Leitch, Ra, 1980. "Stein Paradox And Audit Sampling," Journal of Accounting Research, Wiley Blackwell, vol. 18(1), pages 91-108.
    2. Godfrey, J & Neter, J, 1984. "Bayesian Bounds For Monetary Unit Sampling In Accounting And Auditing," Journal of Accounting Research, Wiley Blackwell, vol. 22(2), pages 497-525.
    3. Menzefricke, U, 1983. "On Sampling Plan Selection With Dollar-Unit Sampling," Journal of Accounting Research, Wiley Blackwell, vol. 21(1), pages 96-105.
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    1. Ulrich Menzefricke & Wally Smieliauskas, 1988. "On sample size allocation in auditing," Contemporary Accounting Research, John Wiley & Sons, vol. 4(2), pages 314-336, March.
    2. Richard A. Grimlund, 1990. "Combined monetary unit sampling from several independent populations: Sample size planning and sample evaluation with the moment method," Contemporary Accounting Research, John Wiley & Sons, vol. 6(2), pages 446-484, March.

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