students will be completing a final paper on heuristics and biases . The requirements for the final paper are below. The total value of this paper is 50 points. Final Heuristics and Biases Paper...

Various types of Heuristics:
1. Availability heuristic:
i. A person while making a decision would rely on the information that is readily
available to him. This is availability heuristic. More clearly, this is a mental shortcut
that relies on immediate examples that come to a person's mind while evaluating
anything to make a decision.
ii. The problem that this heuristic creates is that it tends to ignore the information that is
not readily available with a person. Subsequently, under the availability heuristic,
people tend to heavily weigh their judgments toward more recent information and
they tend to avoid latest developments on the issues due to lack of information.
Problems may arise even more in cases where the decision to be made is subjective.
This biasness may affect audit while taking the audit samples and analyzing the
usiness risks. Further the conclusiveness of the audit evidence may also be subjected
to this heuristic.
iii. To mitigate the impact of this heuristic the auditor should go beyond the words and
documents said and presented by the management of the company. Auditor needs to
watch carefully the critical issues that might be present and avoid going traditional
while finalizing the audit sample or deriving conclusiveness of evidences.
iv. The cases analyze here in this project specifies that during the process of making the
inferences, the auditor might be biased as this the probabilistic research may not be
epresentative especially when sampling for data to review. Like when an auditor is
asked what the minimum sample size is the number 30 is the minimal sample size
proposed by many textbooks, and consequently many auditors simply use 30 as the
sample size, without going through the process of determining the confidence level,
tolerable and expected e
ors, and so forth in working out the minimum sample size.
As more and more auditors are using 30 as the minimum sample size, it becomes so
popular that it becomes a generally accepted “doctrine” among auditors.
Consequently, the magic number of 30 is readily accessible in the memory and is the
first answer that comes to an auditor’s mind.
2. Representativeness heuristic:
i. Representativeness is how a given sample represents the traits of the category
from which it belongs or has been inherited. It can be defined as the degree to
which an event or a person or a evidence
a. is similar in essential characteristics to its parent population, and
. reflects the salient features of the process by which it is generated
This heuristic is a decision-making shortcut that uses the previous experiences
to drive the decision-making process for future....