Comparison of Analysis Performed By Classical Approach and Bayesian Approach in Auditors' Decision Making Process

Abstract

Auditor is in a decision maker position in many phases of an audit process. The increase of auditor's effectiveness and productivity also increases all of the success of the process. Therefore, the analysis of the phases, which auditor is being a decision maker (judgment field) is very important. These analyses can be performed by some statistical methods that are based on the classical approach or the Bayesian approach. In this study, the same model and data which is used in doctorate dissertation named "The Bayesian Approach in Objectifying of Auditor's Judgment and an Application". The variables that can be effective in decisions in the pre-engagement investigation and client acceptance phase are analyzed both by classical approach and Bayesian approach (By using logistic regression model). In conclusion, analyzing the complex structures about decision making that are presented in the judgment fields can be possible by Bayesian approach due to the fact that Bayesian approach can analyze both objective and subjective components. Consequently, auditor's subjective judgment is included into the audit process by being objective and therefore the process is strengthened.