Financial audits are basically sampling procedures to verify with a predetermined accuracy the sources and uses of the company receipts and expenditures; the larger the sample, the higher the...

Financial audits are basically sampling procedures to verify with a predetermined

accuracy the sources and uses of the company receipts and expenditures; the

larger the sample, the higher the accuracy. What’s the maximum amount the

Compensation Committee of the board will be willing to pay for a perfect forecast

if it were possible for the auditors to distinguish good from medium luck? What

about medium from bad luck?