Despite the risks associated with linear regression, experts often use it in dispute resolution settings. Part 1 of this two-part article illuminates linear regression principles and pitfalls in the context of an actual case and offers related practice pointers. Part 2 demonstrates the use of...

In 2010, Robert M. Lloyd wrote, “In an ideal world, a court would be able to hear the evidence, estimate the plaintiff's damages, and quantify its own confidence that the estimate was accurate.” This article, the second in a two-part series, argues that Bayesian networks can move the legal...

Regulatory efforts in the United States and European Union have recently refocused on materiality, an essential but elusive securities law concept. The renewed focus is due in part to increasing globalization of capital markets, data, and information channels that has highlighted inconsistencies...

The 2008 collapse of Lehman Brothers reopened wounds many thought were healed by the Sarbanes-Oxley Act (SOX) in 2002. The Lehman litigation finally ended in late 2013 with audit firm Ernst & Young paying $99 million to investors who claimed the firm misled them with generally accepted...

Prior auditing research has found that negotiation plays an important role in audit outcomes. General purpose negotiating literature suggests that bargaining styles are an important factor in business negotiations and that bargaining style mismatches between negotiating counterparties can...

False positives or “Type I errors,” wherein test results indicate fraud where none actually exists, have been described as a costly “cry wolf problem” in auditing practice. Benford's Law, used in screening for financial statement manipulation, is especially prone to false positives when...