Illustration of false positive and false negative

False positive is the idea of getting a result that incorrectly tells you the result is true or correct or positive.

False negative is a result that incorrectly tells you the result is wrong or incorrect or negative.

A great visual at Marginal Revolution: Type I and Type II Errors Simplified.

A few examples from the illustration, life, and auditing:

False positive:

  • Telling a man he is pregnant.
  • Test result that says you are doing drugs even though it was the sesame seed bagel you ate before the test that triggered the result.
  • Concluding there is an error is a sample when the population is actually error-free. Impact? You do unneeded testing to reach a correct conclusion the population is okay.

False negative:

  • Telling a woman with a basketball sized bulge at her lower abdomen that she isn’t pregnant.
  • Test result that says you are sober even though you are falling-down drunk.
  • Concluding a population is okay based on a sample even though there are multiple material errors. Impact? You issue a clean opinion on a materially incorrect financial statement.

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