You are using sampling to test the following control: all credit sales over $1,000 require a credit check. What is the population for your test?
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You are using sampling to test the following control: all credit sales over $1,000 require a credit check. What is the population for your test?
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- A scrap metal dealer claims that tye mean of its cash sales in no more than $80, although an Internal revenue service agent believes that the dealer is being dishonest. Observing a sample of 20 cash customers the agent finds the mean cash sales to be $91 with a standard deviation of $21. Assuming the popUlation is distributed Approximately normally, and using the 0.05 level of significance , will the agents suspicion be confirmed?An auditor is going to choose a sample of accounts receivable balances at year end to test and has determined the appropriate sampling interval to be 4 with a random start of the second balance in the list. Presented below are the first 10 accounts in the list (in order). Determine the first 2 account balances (including the random start) that will be sampled and tested using the sampling interval. Beads Galore $678 Beads N Such $5,125 Island Time Beads $235 Premier Beads $4,020 Regal Beads $567 Seattle Bead Xchange $321 Shipwreck Beads $3,502 The Bead Place $870 The Bead Place Too $450 The Bead Place Too Phoenix $125. 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?
- MUS is based on attribute sampling theory but modified to evaluate monetary conclusion rather than the rate of occurrence. This can give the impression that MUS is more advanced than RUS since it utilizes the monetary conclusion rather than the rate of occurrence to evaluate statistical findings. MUS is perfect for measuring how many dollars are incorrect, while attribute sampling is excellent for determining the deviation rate. In your opinion, which approach is the most effective when evaluating the effectiveness of customer credit checks?The Sunny Dale Bank monitors the time required to serve customers at the drive-through window becauseit is an important quality factor in competing with other banks in the city. After analyzing the data gathered inan extensive study of the window operation, bank management determined that the mean time to processa customer at the peak demand period is 5 minutes, with a standard deviation of 1.5 minutes. Managementwants to monitor the mean time to process a customer by periodically using a sample size of six customers. Assume that the process variability is in statistical control. Design an x-chart that has a type I error of5 percent. That is, set the control limits so that there is a 2.5 percent chance a sample result will fall below theLCL and a 2.5 percent chance that a sample result will fall above the UCL. After several weeks of sampling,two successive samples came in at 3.70 and 3.68 minutes, respectively. Is the customer service process instatistical control?Sample Selection. Read each of the following cases. Explain for each case how you couldselect a sample having the best chance of being representative of the population using(1) unrestricted random selection and (2) systematic random selection. a. You need to select a sample of recorded cash disbursements. The client used two bankaccounts for general disbursements. Account 1 was used during January–August andissued checks numbered 3633–6632. Account 2 was used during May–December andissued checks numbered 0001–6000.b. You need to select a sample of purchase orders. The client issued prenumbered purchaseorders in the sequence 9000–13999. You realize that if you select five-digit random numbersfrom a table and look for numbers in this sequence, 95 percent of the random numbersyou scan will be discards because a table has 100,000 different five-digit randomnumbers. (The computer is down today!) How can you alter this sequence to reduce thenumber of instances in which the numbers in the…
- Which kind of sampling plan was used in each of the following situation? Would the plan result in an unbiased sample? - the manager of large shopping mall are trying to decide whether to add another information booth to the concourse. They hire a student to stand by one door and ask the next 100 people who enter the mall wether they would like to see another information booth added to the mall and If so where?Attribute Sampling and Monetary-Unit Sampling are two sampling techniques designed to help an auditor test controls. Discuss how each are different and provide an example of how you would decide which one to use if you were auditing a company’s credit-check control for customer orders. Defend which technique, in your opinion, is more reliable. Provide examples to support your opinion.Assume that you have selected a random sample of 15 checks from a population of 800 checks. The checks you have selected are the following numbers: 664, 789, 650, 136, 365, 538, 800, 657, 110, 136, 398, 645, 214, 544, and 777. Based on this sample, evaluate the truth of the following statements regarding your findings. Describe why you feel each statement is true or false. a. You have determined that Check No. 365 was not properly signed and was paid to a fictitious vendor. You conclude that fraud exists in the population. b. You have determined that no fraud exists in the sample of 15 checks you evaluated. You conclude that no fraud exists in the population.
- An auditor had decided to use probability-proportional-to-size (PPS) sampling, also called dollar-unit or cumulative monetary unit (CMU) sampling, in the audit of the client’s accounts receivable balance. The auditor discovered 3 misstatements while doing their testing. Complete the spreadsheet below and calculate the total projected misstatement.You are auditing accounts receivable for a small company and have found the following results: Number and Size of Client Accounts Book Value of Stratum Book Value of Sample Audit Value of Sample 1,202 accounts < $1,000 $ 1,000,000 $ 75,000 $ 60,000 532 accounts > $1,000 $ 777,504 $ 36,400 $ 34,400 Use ratio projection to project your results. Show your final results. and label appropriately.The accounting department reports the accounts receivable balance as $175,000.You are willing to accept that balance if it is within $15,000 of the actual balance.Using a variables sampling plan, you compute a 95% confidence interval of $173,000to $187,000. You would therefore(1) find it impossible to determine the acceptability of the balance.(2) accept the balance but with a lower level of confidence.(3) take a larger sample before rejecting the sample and requiring adjustments.(4) accept the $175,000 balance because the confidence interval is within themateriality limits.