On maximum entropy priors and a most likely likelihood in auditing
- Hernández Bastida, Agustín
- Martel Escobar, María del Carmen
- Vázquez Polo, Francisco José
ISSN: 0210-8054
Ano de publicación: 1998
Volume: 22
Número: 2
Páxinas: 231-242
Tipo: Artigo
Outras publicacións en: Questiió: Quaderns d'Estadística, Sistemes, Informatica i Investigació Operativa
Resumo
There are two basic questions auditors and accountants must consider when developing test and estimation applications using Bayes' Theorem: What prior probability function should be used and what likelihood function should be used. In this paper we propose to use a maximum entropy prior probability function MEP with the most likely likelihood function MLL in the Quasi-Bayesian QB model introduced by McCray (1984). It is defined on an adequate parameter. Thus procedure only needs an expected value of ?0 known (in this paper the expected tainting) to obtain a MEP all an auditor or accountant need to supply are the range, as with any other prior, and the expected tainting, ?0. We will see some practical applications of the methodology proposed about internal control evaluation in auditing