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Book of Dus: The Origins and Destiny of the Alethiometer



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book of Dus



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Problems in statistical auditing are usually one-sided. In fact, the main interest for auditors is to determine the quantiles of the total amount of error, and then to compare these quantiles with a given materiality fixed by the auditor, so that the accounting statement can be accepted or rejected. Dollar unit sampling (DUS) is a useful procedure to collect sample information, whereby items are chosen with a probability proportional to book amounts and in which the relevant error amount distribution is the distribution of the taints weighted by the book value. The likelihood induced by DUS refers to a 201-variate parameter p but the prior information is in a subparameter θ linear function of p , representing the total amount of error. This means that partial prior information must be processed. In this paper, two main proposals are made: (1) to modify the likelihood, to make it compatible with prior information and thus obtain a Bayesian analysis for hypotheses to be tested; (2) to use a maximum entropy prior to incorporate limited auditor information. To achieve these goals, we obtain a modified likelihood function inspired by the induced likelihood described by Zehna (1966) and then adapt the Bayes' theorem to this likelihood in order to derive a posterior distribution for θ . This approach shows that the DUS methodology can be justified as a natural method of processing partial prior information in auditing and that a Bayesian analysis can be performed even when prior information is only available for a subparameter of the model. Finally, some numerical examples are presented.


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Dr. Shamiran Mako is a political scientist with expertise on the comparative politics and international relations of the Middle East and North Africa (MENA region). Her research focuses on state formation, authoritarianism, civil wars, democratization, post-conflict state and peacebuilding, revolutions and social movements, ethnic conflict and identity politics. She is currently working on two book projects. The first traces the institutional legacies of ethnic conflict in Iraq and analyzes the effects of structural and institutional constraints on the mobilization calculous of communal groups throughout formative statebuilding periods. The second project is a co-authored book with Professor Valentine Moghadam of Northeastern University that explains divergent outcomes of the Arab Uprisings. The book examines the socio-economic and political dynamics that have shaped the trajectory of progress and stagnation across seven MENA-region country case studies. 2ff7e9595c


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