# chaos theory

- The proposition that a system, although governed by deterministic laws, displays unpredictability owing to sensitivity to changes in independent variables. Chaos in this sense does not refer to the everyday sense of "utter confusion." Weather patterns are often given as a chaos theory example, in that they combine predictability and unpredictability. A popular image associated with the theory is the notion that the flapping of a butterfly’s wings can disturb the atmosphere, contributing to a chain of events that causes an environmental catastrophe elsewhere. Chaos theory is a sophisticated and highly technical branch of physics and mathematics, and some commentators have attempted to apply its implications to investments, and even to auditing. Further reading: Peters (1994); Vinten (1991)

*Auditor's dictionary.
2014.*

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