Module 18 - Audit Process: The Use Of Statistics Flashcards
What is benfords law?
A probability distribution for the likelihood of the first digit in a set of numbers
What is regression analysis?
A technique that can be used to perform analytical review through audit data analytics tools
It is a statistical method for estimating the relationship among variables based on past relationships
Can be used to compare historic trends in the relationship between two variables to identify where current year data may be misstated
What does a correlation show?
Whether two variables are related and the strength of this relationship
Does correlation show causation?
No
A correlation coefficient of -1 indicates what?
An inverse relationship
Statistical sampling is an approach to audit sampling that has what characteristics?
Random selection of the sample items
Use of probability theory to evaluate sample results, including measurement of sampling risk
