Question: An accounting firm uses sampling methods in its client auditing processes. Accounts of a particular type are grouped together in a batch size of 25.

An accounting firm uses sampling methods in its client auditing processes. Accounts of a particular type are grouped together in a batch size of 25. The auditor is concerned about erroneous accounts escaping the auditing process. Sampling and auditing the accounts is time consuming and very expensive, and a random sample of size n = 5 is about the largest sample that can practically be used. Suppose that the batch of accounts contains one erroneous account. What is the probability that the sample that is selected contains the erroneous account?

Step by Step Solution

★★★★★

3.41 Rating (170 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

The sampling distribution for this problem is the hypergeometric ... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

593-M-S-S-I (3576).docx

120 KBs Word File

Students Have Also Explored These Related Statistics Questions!

Draw trees representing the sequence of experiments. 1. Experiment I is performed. Outcome a occurs with probability .4, and outcome b occurs with probability .6. Then experiment II is performed. Its...

1. If H0 holds, then p in the sample will be less than 0.4. 2. By setting a small a-level, the accounting firm reduces the chance of a test indicating that it should add this new service even though...

The accounting firm described in Exercise 28 is interested in providing opportunities for its auditors to gain more expertise in statistical sampling methods. They wish to compare traditional...

SS 15.1. An accounting firm uses sampling methods in its client auditing processes. Accounts of a partic- ular type are grouped together in a batch size 15.8 of 25. The auditor is concerned about...

I'm an undergrad accounting student in an introduction to forensic accounting course.I need help getting started on a final project for this class over a fictitious company called the Grand Teton...

Using game theory and strategic reasoning concepts to prevent and detect fraud. I need half page summary of this article Accounting Horizons Vol. 18, No. 3 September 2004 pp. 173-184 Using Game...

Stephanie is auditing a major consumer products manufacturer. She is building her audit plan and trying to determine her approach to auditing their ending inventory balance as well as the long-term...

Pick a case and become familiar with the case requirements. Use what you learned on chapter 19. For formatting, use times new roman 12 pt font and double space your answers. You must include...

International Journal of Business and Management Invention ISSN (Online): 2319 - 8028, ISSN (Print): 2319 - 801X www.ijbmi.org || Volume 6 Issue 3 || March. 2017 || PP51-59 Effect of Auditor...

A train travels 101.2 kmE, then 225.9 kmW, and finally 144.2 km E. The train takes 23.11 hours to make the entire trip. What is the train's average velocity?

Let R have the Euclidean inner product. Find the cosine of the angle between u and v. u = (8,-2) and v = (6,5). Carry out all calculations exactly and round the final answer to 4 decimal places. cos...

The method of measuring long - lived assets at their estimated value in an output market is the expected benefit approach.

In 1990, Pakistans total nominal GDP was $34,050 million. In 2000, total nominal GDP had increased to $51,920 million. a What was the total percentage change in nominal GDP between 1990 and 2000? b...

1. For each CardioGood Fitness treadmill product line (see the CardioGoodFitness file), construct two- way contingency tables of gender, education in years, relationship status, and self- rated...

1. For each CardioGood Fitness treadmill product line, determine whether the age, income, usage, and the 2. Write a report to be presented to the management of CardioGood Fitness, detailing your...

1. Construct 95% confidence interval estimates to create a customer profile for each CardioGood Fitness treadmill product line. 2. Write a report to be presented to the management of CardioGood...

As a new employee in the Lottery Commission, your first job is to design a new prize. Your idea is to create two grand prize choices: (1) receiving the lump sum of $1 million at the end of year 5, or...

Design a flowchart that takes as input 2 decimal digits and displays displays their sum in hexadecimal using flowgorithm. please be clear with the equations for each loop and what variables needing...

Practice Assignment Gradebook ORION Downloadable eTextbook ssignment ER FULL SCREEN PRINTER VERSION 1 BACK NEXT JO Chapter 11, Section 11.3, Problem 030 K Two random samples, one of 95 blue-collar...