Dollar-unit sampling: a comparison of the quasi-Bayesian and moment bounds

Article Abstract:

The relative performance of two auditing procedures for dollar-unit sampling, the quasi-Bayesian method developed by McCray (1984) and a modified version of the moment method developed by Dworin and Grimlund, are tested. Data include simulation studies of 96 representative accounts receivable and inventory populations. Results indicate nominal confidence levels for both methods, and tighter bounds for both methods than those provided by the Stringer procedure. The modified moment (MM) method is easier to use than the quasi-Bayesian (QB) method. The MM method provides a tighter confidence bound at low error rates; the QB method provides tighter bounds for populations with high error rates.

Standards, Methods, United States, Bayesian statistical decision theory, Bayesian analysis, Financial research

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On the association of cash flow variables with market risk: further evidence

Article Abstract:

Research on market risk assessment and to determine whether funds and cash flows possess information beyond accrual earnings is described. Cash flow risk measures were found to provide better explanation of variability in market betas than were provided by the earnings risk measure. Earnings betas do not provide better explanatory power than either funds or cash flow betas. Accrual earnings information appears to be a subset of cash flows information.

Risk management, Cash flow

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