5. As an example of a situation in which several different statistics could reasonably be used to...

Question:

5. As an example of a situation in which several different statistics could reasonably be used to calculate a point estimate, consider a population of N invoices. Associated with each invoice is its “book value,” the recorded amount of that invoice. Let T denote the total book value, a known amount. Some of these book values are erroneous. An audit will be carried out by randomly selecting n invoices and determining the audited (correct) value for each one.

Suppose that the sample gives the following results (in dollars).

Let Y  sample mean book value X  sample mean audited value D  sample mean error Propose three different statistics for estimating the total audited (i.e., correct) value—one involving just N and X, another involving T, N, and D, and the last involving T and X/Y . If N  5000 and T  1,761,300, calculate the three corresponding point estimates. (The article “Statistical Models and Analysis in Auditing,” Statistical Science, 1989:

2–33). discusses properties of these estimators.)

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question
Question Posted: