While reviewing the sample of audit fees, a senior accountant for the firm notes

Question

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 2.87 hours. A new sample of 15 audit times shows the following times in hours. Complete parts a and b below. 3.1 4.3 4.4 3.6 4.4 2.7 3.5 3.1 3.9 3.3 4.7 3.6 4.9 2.9 2.6 a) Assume the conditions necessary for inference are met. Find a 95% confidence interval for the mean audit time The 95% confidence interval to estimate the mean audit time is from 1 to Round to two decimal places as needed.) b) Based on your answer to part a, do you think that the audit times have, in fact, increased? ( A. Since the population mean. 2.87, is below the 95% confidence interval, it can be said with B. Since the population mean. 2.87, is above the 95% confidence interval, it can be said with 95% confidence that the mean audit time has increased. 95% confidence that the mean audit time has increased Since the population mean, 2.87, is contained within the 95% confidence interval it can beD said with 95% confidence that the mean audit time has not increased Since the population mean, 2.87, is contained within the 95% confidence interval, it can be said with 95% confidence that the mean audit time has increased. O C

Explanation / Answer

a) The statistical software output for this problem is:

One sample T confidence interval:
: Mean of variable

95% confidence interval results:

Hence,

95% confidence interval will be:

3.26 to 4.07

b) Option A is correct.

Variable Sample Mean Std. Err. DF L. Limit U. Limit Data 3.6666667 0.19015449 14 3.2588258 4.0745075

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.