Statistical Techniques for Forensic Accounting: Understanding the Theory and Application of Data Analysis

7. Discrete Probability Distributions

Probability theory is nothing but common sense reduced to calculation.

—Pierre Simon Laplace, Théorie Analytique des Probabilitiés, 1812

7.1. Introduction

The previous chapter presented the basic concepts of probability and mathematical notation. In this chapter the connections between descriptive statistics and probability distributions are established. In a forensic accounting context, determining the appropriate data-gathering procedures, the appropriate intervals, and the right methods of presenting the data could all be complex judgments and require the use of statistical planning tools. Fortunately, many of the data characteristics though seemingly unrelated share similar underlying properties that ...