. The true proportion of accounts receivable with some kind of error is 8 percent for Moby Group. If an auditor randomly samples 100 accounts receivable,a) is it acceptable to use the normal approximation to estimate the probability that fewer than two will contain errors? Explain your reasoning.b) what is the mean and standard deviation of errors?c) assume the auditor takes a sample of 150, what is the probability that less than 5 will contain errors?

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The true proportion of accounts receivable with some kind of error is 8 percent for Moby Group. If an

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter9: Auditing The Revenue Cycle.

Section: Chapter Questions

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. The true proportion of accounts receivable with some kind of error is 8 percent for Moby Group. If an auditor randomly samples 100 accounts receivable,

a) is it acceptable to use the normal approximation to estimate the probability that fewer than two will contain errors? Explain your reasoning.
b) what is the mean and standard deviation of errors?
c) assume the auditor takes a sample of 150, what is the probability that less than 5 will contain errors?

Definition Definition Money that the business will be receiving from its clients who have utilized the credit provided to buy its goods and services. The credit period typically lasts for a short term, lasting from a few days, a few months, to a year.

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