Bayesian approach in strategic management accounting and audit

Abstract

Bayes' theorem allows us to determine the probability of an event when another event directly related to it occurs. Thus, the hypothesis about the object under investigation undergoes transformation in the process of receiving new information. This transformation occurs by increasing or decreasing the confidence in the original model data. This determines the relevance of the topic in matters of the influence of the subjective opinion of the auditor and the possibility of obtaining error in the audit, which leads to an incorrect evaluation of the financial statements of the organization.