Question: Most corporations use external accounting and auditing firms for performing
Most corporations use external accounting and auditing firms for performing audits on their financial records. In medium to large businesses there may be a very large number of accounts to audit, so auditors often use a technique called audit sampling, in which a random sample of accounts are selected for auditing and the results used to draw conclusions about the organization’s accounting practices. Table 7E.18 presents the results of an audit sampling process, in which 25 accounts were randomly selected and the number of posting errors found. Set up a control chart for nonconformities for this process. Is this process in statistical control?
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