An auditor needs to estimate the percentage of times a company fails to follow an internal control procedure. A sample of 50 from a population of 1,000 items is selected, and in 7 instances, the internal control procedure was not followed.
a. Construct a 90% one-sided confidence interval estimate for the population proportion of items in which the internal control procedure was not followed.
b. If the tolerable exception rate is 0.15, what should the auditor conclude?