Abstract ABSTRACT: A modification of the multinomial bound has been developed which enables the auditor to obtain bounds for substantially larger numbers of errors in audit samples than was possible previously. In this paper, the characteristics of this modified bound are examined and compared with those of the widely used Stringer bound. It is found that the modified multinomial bound is usually considerably tighter than the Stringer bound and should be useful in many audit applications. The confidence level of the modified multinomial bound is also investigated by sampling simulation, and it is found that the level exceeds or is close to the nominal level for all populations studied.
Leitch et al. (Thu,) studied this question.