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March 18, 2026The Accounting Review

Faulty Advice About Statistical Sampling--Some Comments on 'A Simplified Statistical Technique for Use in Verifying Accounts Receivable'

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Authors

FSFrederick F. StephanDeutsches Elektronen-Synchrotron DESY

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Overview

This commentary critiques sampling techniques for accounts receivable, suggesting improvements and cautioning against increased error tolerances.

Key Points

  • The paper addresses flaws in a proposed simplified statistical sampling technique for accountants and auditors.
  • Critiques the suggested increase in error tolerances for statistical sampling.
  • Discusses the importance of distinguishing between tolerance limits and limits of immateriality.
  • Analyzes the effectiveness of stratification as a sampling technique.
  • Highlights serious misunderstandings in the simplified technique's approach.
  • Emphasizes that tolerances should consider risks and materiality, not just convenience.
  • Identifies specific flaws in the application of stratification.

Cite This Study

Frederick F. Stephan (1960) studied this question.

synapsesocial.com/papers/69ba43884e9516ffd37a4ea1https://doi.org/10.2308/tar-7061057
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Also Consider

Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context:

  1. 1A SIMPLIFIED STATISTICAL TECHNIQUE FOR USE IN VERIFYING ACCOUNTS RECEIVABLE: A REJOINDER.1960
  2. 2PROBLEMS IN EXPERIMENTING WITH THE APPLICATION OF STATISTICAL TECHNIQUES IN AUDITING.1954
  3. 3STATISTICAL SAMPLING AND THE ACCOUNTING CURRICULUM.1958 · 1 citations
  4. 4STATISTICS OFFERS A SOLUTION TO TOMORROW'S AUDITING COMPLEXITIES.1962
  5. 5APPLICABILITY OF STATISTICAL SAMPLING TECHNIQUES TO THE CONFIRMATION OF ACCOUNTS RECEIVABLE.1956