Abstract This article cites a study evaluating the use of simple comparison-based decision models with more rigorous models as analytical procedures in accounting. The study evaluates the models by using data acquired from a large certified public accounting firm. An audit strategy, suggestively, consists of three stages: internal control evaluations; analytical procedures; and substantive testing. Analytical procedures involve the comparison of amounts recorded in the accounting records to expected amounts developed by the auditor. The comparisons assist the auditor in making decisions regarding the reasonableness of the amounts shown in the financial statements. Researchers of the said study have chosen three methods to represent the simple to the more rigorous: a simple model with a simple investigation rule; a statistical model with a simple investigation rule; and a statistical model with a statistical investigation rule. Results of various expectation models suggest that more rigorous methods may provide more precise expectation results.
Wilson et al. (Fri,) studied this question.