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Your employer is interested to know the extent to which firm turnover, the total number of employees and the number of subsidiaries affect audit fees
Your employer is interested to know the extent to which firm turnover, the total number of employees and the number of subsidiaries affect audit fees paid by the firms in the sector.
FirmID Turnover Employees Subsidiaries AuditFee
Use the above to answer the questions below:
Run a multiple linear regression of Audit Fee on Turnover, Employees and Subsidiaries. Based on your results, how would you write the estimated regression equation for the expected value of audit fee?
Predict the expected audit fee paid by firms with turnover of million that have employees and two subsidiaries?
What measure can be used to assess a regressions ability to make good predictions? Comment on the goodness of fit of the estimated regression model?
Test the null hypothesis that firm turnover has no linear effect on audit fees?
Test the null hypothesis that the total number of subsidiaries has no linear effect on audit fees?
What conclusions can you draw about the factors that affect Audit Fee? Interpret the slope coefficients of the statistically significant factors
Your employer asks you to produce a table with mean, median, variance and standard deviation of the variable Turnover in the dataset by using the appropriate Excel functions. Use the file audit fees to calculate the mean, median, variance and standard deviation?
Use the dataset to produce a scatter plot of the number of employees and turnover. Explain whether the plot suggests any relationship between them?
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