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While reviewing the sample of audit fees a senior accountant

While reviewing the sample of audit fees, a senior accountant for the firm notes that the fee charged by the firm’s accountants depends on the complexity of the return. A comparison of actual charges therefore might not provide the information needed to set next year’s fees. To better understand the fee structure, the senior accountant requests a new sample that measures the time the accountants spent on the audit. Last year, the average hours charged per client audit was 3.25 hours. A new sample of 10 audit times shows the following times in hours:

4.2, 3.7, 4.8, 2.9, 3.1, 4.5, 4.2, 4.1, 5.0, 3.4

a) Assume the conditions necessary for inference are met. Find a 90% confidence interval estimate for the mean audit time.

b) Based on your answer to part a, do you think that the audit times have, in fact, increased?

4.2, 3.7, 4.8, 2.9, 3.1, 4.5, 4.2, 4.1, 5.0, 3.4

a) Assume the conditions necessary for inference are met. Find a 90% confidence interval estimate for the mean audit time.

b) Based on your answer to part a, do you think that the audit times have, in fact, increased?

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