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?
Answer to relevant QuestionsA metropolitan police agency is studying the incidence of drivers operating their vehicles without the minimum liability insurance required by law. The data are collected from drivers who have been stopped by an officer for ...Reconsider the loan application data in Table 7E.2. Set up the fraction nonconforming control chart for this process. Use the standardized control chart approach. Plot the preliminary data in Table 7E.2 on the chart. Is the ...Kittlitz (1999) presents data on homicides in Waco, Texas, for the years 1980-1989 (data taken from the Waco Tribune-Herald, December 29, 1989). There were 29 homicides in 1989. Table 7E.20 gives the dates of the 1989 ...Consider the two processes shown in Table 8E.1 (the sample size n = 5). Specifications are at 100 ± 10. Calculate Cp, Cpk, and Cpm and interpret these ratios. Which process would you prefer to use? Suppose that a quality characteristic has a normal distribution with specification limits at USL = 100 and LSL = 90. A random sample of 30 parts results in x = 97 and s = 1.6. (a) Calculate a point estimate of Cpk. (b) Find ...
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