TY  - JOUR
AB  - Managerial auditors (MAs) are frequently relying on mistaken mixed costs (MC) forecasting assumptions. Two such assumptions are that MC are linear within the relevant range and variable costs vary proportionately with activity levels. Departure from these assumptions can lead to understating expenses, overstating profits, and even to fraud, litigation, and mounting professional liability risk. Develops a forecasting model of mixed cost error estimates, or error difference (ED). MAs can reduce the risk of litigation and professional liability by including such an ED in the internal control structure of a company. Uses Sensormatic Corporation and the electronics security industry as sample case because of the recent prominence of litigation and professional auditor liability verdicts. Focuses on the electronics security industry, but some of the findings may apply to other industries.
VL  - 12
IS  - 6
SN  - 0268-6902
DO  - 10.1108/02686909710180643
UR  - https://doi.org/10.1108/02686909710180643
AU  - Rushinek Avi
PY  - 1997
Y1  - 1997/01/01
TI  - Managerial auditors’ mixed cost forecasting assumption departure error estimates for litigation and professional liability risk reduction: the electronic security industry
T2  - Managerial Auditing Journal
PB  - MCB UP Ltd
SP  - 285
EP  - 297
Y2  - 2024/04/19
ER  -