Question: An accounting firm uses sampling methods in its client auditing
An accounting firm uses sampling methods in its client auditing processes. Accounts of a particular type are grouped together in a batch size of 25. The auditor is concerned about erroneous accounts escaping the auditing process. Sampling and auditing the accounts is time consuming and very expensive, and a random sample of size n = 5 is about the largest sample that can practically be used. Suppose that the batch of accounts contains one erroneous account. What is the probability that the sample that is selected contains the erroneous account?
Answer to relevant QuestionsFind a single-sampling plan for which p1 = 0.02, = 0.01, p2 = 0.06, and = 0.10. (a) Derive an item-by-item sequential-sampling plan for which p1 = 0.01, a = 0.05, p2 = 0.10, and β= 0.10. (b) Draw the OC curve for this plan. A product is shipped in lots of size N = 2,000. Find a Dodge–Romig single-sampling plan for which the LTPD = 1%, assuming that the process average is 0.25% defective. Draw the OC curve and the ATI curve for this plan. ...Find a single-sampling plan for which p1 = 0.01, = 0.05, p2 = 0.10, and = 0.10. Describe how rectifying inspection can be used with variables sampling. What are the appropriate equations for the AOQ and the ATI, assuming single sampling and requiring that all defective items found in either sampling or ...
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