In an article in Accounting and Business Research, Carslaw and Kaplan investigate factors that influence audit delay
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Carslaw and Kaplan investigated audit delay for two kinds of public companies-owner-controlled and manager-controlled companies. Here a company is considered to be owner controlled if 30 percent or more of the common stock is controlled by a single outside investor (an investor not part of the management group or board of directors). Otherwise, a company is considered manager controlled. It was felt that the type of control influences audit delay. To quote Carslaw and Kaplan:
Large external investors, having an acute need for timely information, may be expected to pressure the company and auditor to start and to complete the audit as rapidly as practicable.
a. Suppose that a random sample of KM) public owner-controlled companies in New Zealand is found to give a mean audit delay of = 82.6 days, and assume that σ equals 33 days. Calculate a 95 percent confidence interval for the population mean audit delay for all public owner-controlled companies in New Zealand.
b. Suppose that a random sample of KM) public manager-controlled companies in New Zealand is found to give a mean audit delay of = 93 days, and assume that σ equals 37 days. Calculate a 95 percent confidence interval for the population mean audit delay for all public manager-controlled companies in New Zealand.
c. Use the confidence intervals you computed in parts a and b to compare the mean audit delay for all public owner-controlled companies versus that of all public manager-controlled companies. How do the means compare? Explain.
Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
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Related Book For
Business Statistics In Practice
ISBN: 9780073401836
6th Edition
Authors: Bruce Bowerman, Richard O'Connell
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