Some accounting firms give the client an option to pay a fee when the tax return

Question

Some accounting firms give the client an option to pay a fee when the tax return is completed that guarantees tax advices and support from the accountant if the client were audited. A large accounting firm is trying to determine what fee to charge for next year's returns. In previous years, the actual mean cost to the firm for attending a client audit session was $690. To determine if this cost has changed, the firm randomly samples 32 client audit fees. The sample mean audit cost was S670 with a standard deviation of $75. Complete parts a through c below. a) Develop a 99% confidence interval estimate for the mean audit cost. The 99% confidence interval for the mean audit cost is ($ 634 $ 706 ) (Round to the nearest dollar as needed.) b) Perform the appropriate test to determine if the mean audit cost is now different from the historical mean of $690. Use a.01 level of significance Fail to reject the null hypothesis that the mean audit cost is the historical mean of $690. The data from the sample of client audit fees evidence that the mean audit cost is now different. provides sufficient

Explanation / Answer

Since 690 is in our confidence interval, we fail to reject the null hypothesis and hence, sample do not provide sufficient evidence that the mean audit cost is now different.

Hence the correct options will be:

Do not reject; Does not provide

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