| Abstract: | This paper evaluates the effectiveness of various analytical review (AR) procedures in detecting material errors in account balances. The study tested nine nonstatistical AR procedures based on common heuristic and ratio analyses and four AR procedures based on regression analysis. Simulated account balances were seeded with various magnitudes of errors and each AR procedure was used to detect the errors. It was found that the regression approaches tended to have fewer Type I and Type II errors than other AR procedures. |
