Benford's Law is a probability rule frequently used by accounting auditors to detect systematic fraud. It...
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Benford's Law is a probability rule frequently used by accounting auditors to detect systematic fraud. It states that approximately 12.3% of numbers will begin with the number 2. An auditor decides to investigate a particular firm further if a sample proportion of their invoices, with the invoiced number beginning with a 2, is in the highest 0.5% of all possible sample proportions. What sample proportion will cause further investigation of the firm if a random sample of 780 invoices is selected? Express your answer in decimal form (ie not as a percentage), correct to two decimal places. Benford's Law is a probability rule frequently used by accounting auditors to detect systematic fraud. It states that approximately 12.3% of numbers will begin with the number 2. An auditor decides to investigate a particular firm further if a sample proportion of their invoices, with the invoiced number beginning with a 2, is in the highest 0.5% of all possible sample proportions. What sample proportion will cause further investigation of the firm if a random sample of 780 invoices is selected? Express your answer in decimal form (ie not as a percentage), correct to two decimal places.
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To determine the sample proportion that will trigger further investigation we need to find the cutof... View the full answer
Related Book For
Auditing and Assurance Services A Systematic Approach
ISBN: 978-1259162343
9th edition
Authors: William Messier, Steven Glover, Douglas Prawitt
Posted Date:
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