7 ms·

Can you explain how this might be related to the concept of "overfitting"?

• nabla9 12y ago
  It's not specially related to overfitting. It's just general property of abstraction process (overfitting can be thought as over-abstraction). Financial accounting can be thought as system that tries to make it easy to differentiate between irregularities and normal operation from few summary documents. The summary documents like balance sheets are abstractions of the original records and you can normally detect financial problems easily using them. But if you have intelligent adversary within the accounting process that tries to forge the result, you must look into the original records and go trough them to find forgery.