A Mixed Model for Double Checking Fallible Auditors

Abstract

A Mixed Model for Double Checking Fallible AuditorsRaats, V.M.; Moors, J.J.A.; van der Genugten, Ben General rightsCopyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights.-Users may download and print one copy of any publication from the public portal for the purpose of private study or research -You may not further distribute the material or use it for any profit-making activity or commercial gain -You may freely distribute the URL identifying the publication in the public portal Take down policy If you believe that this document breaches copyright, please contact us providing details, and we will remove access to the work immediately and investigate your claim. AbstractThe paper discusses the problem of a fallible auditor who assesses the values of sampled records, but may make mistakes. To detect these mistakes, a subsample of the checked elements is checked again, now by an infallible expert.We propose a model for this kind of double check, which takes into account that records are often correct; however, if they are incorrect, the errors can take on many different values -as is often the case in audit practice. The model therefore involves error probabilities as well as distributional parameters for error sizes.We derive maximum likelihood estimators for these model parameters and derive from them an estimator for the mean size of the errors in the population. A simulation study shows that the latter outperforms some other -previously introduced -estimators.