Reviews the book "Good Working Papers: An Audit Technique Study."

This note extends the analysis of line-item error taints and error rates originally presented in Johnson, Leitch and Neter [1981] by first considering the distribution of dollar-unit taints, the relevant distribution when simple random sampling is applied to monetary units. Next, empirical evidence on the relation between the taint amount and book amount is presented. Finally, empirical findings on the magnitudes of dollar-unit error rates are provided.

[This note extends the analysis of line-item error taints and error rates originally presented in Johnson, Leitch and Neter [1981] by first considering the distribution of dollar-unit taints, the relevant distribution when simple random sampling is applied to monetary units. Next, empirical evidence on the relation between the taint amount and book amount is presented. Finally, empirical findings on the magnitudes of dollar-unit error rates are provided.]

Auditors require empirical information about the characteristics of errors in audit populations. In this paper, the error characteristics in 55 accounts receivable and 26 inventory audits are examined. First, the error rates present in these audits are analyzed, and the balance between overstatement and understatement errors is examined. The distributions of the error amounts and error taintings are then studied, as well as the relation between error amounts and book amounts. Some major findings are contrary to auditors' expectations, emphasizing the need for replication studies to further explore this area.