Lawrence and Glover published the results of a study in the Journal of Managerial Issues in which they examined the effects of accounting firm mergers on auditing delay. Auditing delay is the time between a company’s fiscal year-end and the date of the auditor’s report. The hypothesis is that with the efficiencies gained through mergers the length of the audit delay would decrease. Suppose that to test their hypothesis, they examined the audit delays on 27 clients of Big Six firms from both before and after the Big Six firm merger (a span of five years).Suppose further that the mean difference in audit delay for these clients from before merger to after merger was a decrease in 3.71 days and the standard deviation of difference was five days. Use these data and α = .01 to test whether the audit delays after the merger were significantly lower than before the merger. Assume that the differences in auditing delay are normally distributed in the population.

  • CreatedFebruary 19, 2015
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