Evaluate the following statement made by an auditor: “I took arandom sample and derived a 90 percent confidence interval of $800,000 to $900,000.That means that the true population value will be between $800,000 and $900,000, 90percent of the time.”
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Evaluate the following statement made by an auditor: “I took a
random sample and derived a 90 percent confidence interval of $800,000 to $900,000.
That means that the true population value will be between $800,000 and $900,000, 90
percent of the time.”
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- a risk manager gathers the following sample data to analyze annual returns for an asset: 12%, 25% and -1%. he wants to compute the best unbiased estimator of the true population mean and standard deviation. the manager's estimate of the standard deviation for this asset should be closest to a. 0.0111 b. 0.0113 c. 0.1054 d. 0.1204.The accounting department reports the accounts receivable balance as $175,000.You are willing to accept that balance if it is within $15,000 of the actual balance.Using a variables sampling plan, you compute a 95% confidence interval of $173,000to $187,000. You would therefore(1) find it impossible to determine the acceptability of the balance.(2) accept the balance but with a lower level of confidence.(3) take a larger sample before rejecting the sample and requiring adjustments.(4) accept the $175,000 balance because the confidence interval is within themateriality limits.Assume that an account with a recorded balance of $5,000 has an audited value of $3,000. By using monetary unit sampling, if the sampling interval is $1,500, the projected misstatement would bea. $600.b. $900.c. $2,000.d. $3,000.
- You are testing your client's allowance, recorded at $1,500,000, with a monetay unit sample. The following results are at a 2-sided confidence level of 90%. Lower confidence limit $1,200,000 uncollectible Upper confidence limit $1,900,000 uncollectible Max. tol. misstatement: $500,000 The client already has a previously recognized a $1.500.000 allowance for uncollectibles recorded. Which of the following would be a materially correct DR or CR adjustment amount? a. DR Allowance $500,000 CR Allowance $500,000 No adjustment needed. CR Allowance $1,550,000 b. d:How large a sample should be selected to provide a 95% confidence interval with a margin of error of 6? Assume that the population standard deviation is 20. Round your answer to next whole number.In a survey, the planning value for the population proportion is p* = 0.25. How large a sample should be taken to provide a 95% confidence interval with a margin of error of 0.03? Round your answer up to the next whole number.
- A component of an account balance has a recorded balance of $10,000 and an audited valueof $8,000. By using monetary unit sampling, if the sampling interval is $20,000, the projected misstatement would bea. $2,000.b. $4,000.c. $5,000.d. $10,000.Review each of the following independent sets of conditions. For each condition, calculatethe (1) sample rate of deviation, (2) ULRD, and (3) allowance for sampling risk (n = samplesize, d = deviations, ROO = risk of overreliance). What is your conclusion regarding therelationship of each of these factors to the ULRD based on comparing the ULRD across different combinations of these factors?a. n = 100, d = 8, ROO = 5%.b. n = 100, d = 4, ROO = 5%.c. n = 100, d = 8, ROO = 10%(2 points) Suppose that we are to conduct the following hypothesis test: Ho p H₁ == 1050 1050 στ == Suppose that you also know that σ = 250, n = 95, 1090, and take a = 0.1. Draw the sampling distribution, and use it to determine each of the following: A. The value of the standardized test statistic: Note: For the next part, your answer should use interval notation. An answer of the form (-00, a) is expressed (-infty, a), an answer of the form (b, x) is expressed (b, infty), and an answer of the form (-00, a) U (b, c) is expressed (-infty, a)U(b, infty). B. The rejection region for the standardized test statistic: C. The p-value is D. Your decision for the hypothesis test: A. Do Not Reject H₁. B. Do Not Reject Ho- C. Reject Ho D. Reject H₁.
- Assume that you have selected a random sample of 15 checks from a population of 800 checks. The checks you have selected are the following numbers: 664, 789, 650, 136, 365, 538, 800, 657, 110, 136, 398, 645, 214, 544, and 777. Based on this sample, evaluate the truth of the following statements regarding your findings. Describe why you feel each statement is true or false. a. You have determined that Check No. 365 was not properly signed and was paid to a fictitious vendor. You conclude that fraud exists in the population. b. You have determined that no fraud exists in the sample of 15 checks you evaluated. You conclude that no fraud exists in the population.Determine the Sample size in the AHMED Company according to the following data: Book value of population tested = 500000 $ The Reliability factor for the specified risk of incorrect acceptance= 3 Tolerable misstatement = 40000 $ Anticipated misstatement= 4000 $ Expansion factor for anticipated misstatement = 1.5In a test of the hypothesis Ho: = 10 versus Ha: H10, a sample of n = 50 observations possessed mean x = 10.8 and standard deviation s = 3.3. Find and interpret the p-value for this test. The p-value for this test is ☐. (Round to four decimal places as needed.)