An Evaluation Of The Negative Binomial Method For Tests Of Controls

Abstract

Auditors often use statistical sampling techniques to test controls. Dhavale (1991) presents a new statistical technique based on the negative binomial distribution for this purpose. This article examines in detail the properties of the new method. The article also provides the computational details necessary to apply the new method. The article concludes that the new method may be useful to auditors in some circumstances.