ON BAYESIAN TESTS IN AUDITING

In auditing the problem of testing hypotheses about frequency of incorrect items is considered. It is treated as the particular case of compliance testing problems. Usually, classical statistical tests are used to testing those types of hypotheses. In the paper the Bayesian approach will be considered. The hypothesis will be tested on the basis of the simple random sample or on the basis of the simple random sample drawn from strata. Usually, Bayesian statistical inference in auditing is based on confidence intervals. Here, instead of that two well known Bayesian rules will be considered. Presented procedures will be illustrated by means of empirical examples.