Question: In an article in the Journal of Accounting Research Ashton

In an article in the Journal of Accounting Research, Ashton, Willingham, and Elliott studied audit delay (the length of time from a company’s fiscal year-end to the date of the auditor’s report) for industrial and financial companies. In the study, a random sample of 250 industrial companies yielded a mean audit delay of 68.04 days with a standard deviation of 35.72 days, while a random sample of 238 financial companies yielded a mean audit delay of 56.74 days with a standard deviation of 34.87 days. Use these sample results to do the following:
a. Calculate a 95 percent confidence interval for the mean audit delay for all industrial companies. t.025 = 1.97 when df = 249.
b. Calculate a 95 percent confidence interval for the mean audit delay for all financial companies. t.025 = 1.97 when df = 237.
c. By comparing the 95 percent confidence intervals you calculated in parts a and b, is there strong evidence that the mean audit delay for all financial companies is shorter than the mean audit delay for all industrial companies? Explain.

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  • CreatedMay 28, 2015
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