An Auditing Firm Has Developed a Set of Criteria for Determining

question 65

Short Answer

An auditing firm has developed a set of criteria for determining whether a particular account (and its balance) is in error. Historically, they know that of balances that were in error, 75 percent were regarded as unusual. Assume Company A shows a history of only 10 percent of the account balances being in error and it also shows that 25 percent of the account balances were unusual. If in an audit, a particular account balance appears unusual, what is the probability that it is in error for Company A?

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Definitions:

Closing Arguments

Closing arguments are the final statements made by attorneys to the jury or judge summarizing the evidence and attempting to persuade them to support their case.

Attorneys

Licensed legal professionals who represent and advise clients in both civil and criminal matters.

Civil Trial

A legal process in which a court resolves a dispute between parties involving legal rights and responsibilities, but not criminal charges.

Jury Selection

The process of choosing individuals from a pool of potential jurors to serve on a jury for a particular trial.