Which of the following applications would an auditor apply to determine the probability of a corporation's account balance being in error?
A)Overinvolvement ratios
B)Probability rules
C)Bayes' theorem
D)Empirical formula

Question

Quizplus · Accepted Answer

Bayes' theorem is used to calculate the probability of an event occurring based on prior knowledge of conditions that might be related to the event. In auditing, Bayes' theorem can be applied to assess the probability of an account balance being in error based on the results of tests performed on the account.

Which of the Following Applications Would an Auditor Apply to Determine