The Accounting Review Vol. 53 No. 1 1978

Dollar Unit Sampling: Multinomial Bounds for Total Overstatement and Understatement Errors.

John Neter¹; Robert A. Leitch²; Stephen E. Fienbery³

¹ Professor of Management Sciences and Statistics, University of Georgia 1 · ² Visiting Associate Professor, Graduate School of Industrial Administration, Carnegie- Mellon University 2 · ³ Professor and Chairman, Department of Applied Statistics, University of Minnesota 3

Abstract

ABSTRACT: This paper presents a statistical sampling approach based on the multinomial distribution for obtaining a bound for either total population understatement or overstatement errors or both. The approach is nonparametric in nature and, unlike most currently used techniques, it has known characteristics so that the auditor is assured of the specified confidence level regardless of the nature of the population and the nature of the error pattern. Results are presented which show the multinomial bound to give tighter bounds than the Stringer bound in all instances stud]ed. The behavior of the multinomial bound is stud[ed with respect to the effects of sample size and error patterns.

DOI

10.2308/tar-4500508

Volume

53

Issue

1

Pages

77-93

Language

en

Sources

openalex crossref