When fraud is suspected, an audit of randomly selected accounts is often conducted. The selected accounts...
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When fraud is suspected, an audit of randomly selected accounts is often conducted. The selected accounts are reviewed by experts, and each account is classified as "fit" or "unfit". The distributions of account values are frequently skewed, with large numbers of small accounts and a small number of large accounts. Simple random sampling would likely be dominated by small accounts and would miss large accounts, so stratification is often used. Here are the data from an audit that used three strata based on the sizes of the accounts: small, medium, and large. Stratum Sampled accounts Number "unfit" Small Medium 59 19 4 762 Large (a) Construct the 3 x 2 table of counts for these data and include the marginal totals. (b) Find the percent of accounts that were "unfit" in each of the three strata. (c) State an appropriate null hypothesis to be tested for these data. (d) Perform the significance test and report your test statistic with degrees of freedom and the p-value. State your conclusion. (e) Consider the Small strata. There are 3118 such accounts in total. Using the sample information in the table, find an estimate of the number of Small accounts in the population that are "unfit". What is the standard error of your estimate? When fraud is suspected, an audit of randomly selected accounts is often conducted. The selected accounts are reviewed by experts, and each account is classified as "fit" or "unfit". The distributions of account values are frequently skewed, with large numbers of small accounts and a small number of large accounts. Simple random sampling would likely be dominated by small accounts and would miss large accounts, so stratification is often used. Here are the data from an audit that used three strata based on the sizes of the accounts: small, medium, and large. Stratum Sampled accounts Number "unfit" Small Medium 59 19 4 762 Large (a) Construct the 3 x 2 table of counts for these data and include the marginal totals. (b) Find the percent of accounts that were "unfit" in each of the three strata. (c) State an appropriate null hypothesis to be tested for these data. (d) Perform the significance test and report your test statistic with degrees of freedom and the p-value. State your conclusion. (e) Consider the Small strata. There are 3118 such accounts in total. Using the sample information in the table, find an estimate of the number of Small accounts in the population that are "unfit". What is the standard error of your estimate?
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Audit Sample Data Analysis a Construct the 3 x 2 table of counts Stratum Fit Unfit Total Small 52 7 59 Medium 15 4 19 Large 6 0 6 Total 73 11 84 drivespreadsheetExport to Sheets Stratum Percent Unfit ... View the full answer
Related Book For
Auditing a business risk appraoch
ISBN: 978-0324375589
6th Edition
Authors: larry e. rittenberg, bradley j. schwieger, karla m. johnston
Posted Date:
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