Company X is meeting with ABC Auditors to provide an initial overview of Company X's environment to ABC Auditors. During this discussion, ABC Auditors inquires about the accuracy of Company X's Accounts Receivable balance. Company X informs ABC Auditors that less than 10% of its accounts are misstated. When ABC Auditors drew a sample of 1,000 individual Accounts Receivable Accounts, 7.5% were found to be misstated.

1) What is the population of interest?

2) What is the sample?

3) What is the parameter?

4) What is the statistic?

5) Does the value 10% refer to the parameter or to the statistic?

6) Is the 7.5% a parameter or a statistic?

7) Explain how the statistic can be used to make inferences about the parameter to test Company X's claim that less than 10% of individual accounts receivable accounts are misstated.