An internal control policy for Rhonda's Online Fashion Accessories requires a quality assurance check before a shipment is made. The tolerable exception rate for this internal control is 0.05. During an audit, 500 shipping records were sampled from a population of 5,000 shipping records, and 12 were found that violated the internal control.
a. Calculate the upper bound for a 95% one-sided confidence interval estimate for the rate of noncompliance.
b. Based on (a), what should the auditor conclude?